Board of Directors plead not guilty as OSP takes them to court for breach of trust

Four members of the Board of Directors of SPRON, Iceland’s largest Savings Bank before the bank collapse in 2008, pleaded not guilty as the Office of the Special Prosecutor took them to court yesterday for breach of trust. This
is the first time the OSP has charged a Board of Directors in connection with alleged criminal activities leading up to the fall of the Icelandic financial system in October of 2008.

Four of the five members of the Board of Directors of SPRON are charged by the OSP. Margret Gudmundsdottir, CEO of Icepharma; Rannveig Rist, CEO of Rio Tinto Alcan; Johann Asgeir Baldurs, Chairman of the Board at Frumherji; and Ari Bergmann Einarsson, investor. Questions were raised about whether Margret Gudmundsdottir of Icepharma and Rannveig Rist of Rio Tinto Alcan , should step aside from their posts in light of the charges, but both say they will not do so.

The OSP said at the District Court in Reykjavik yesterday, that the Board of Directors had misused their powers by agreeing a 2 Billion IKR loan to Exista two weeks before the collapse in light of the situation in Iceland at that time, and that they breached the trust of the stake holders by agreeing the loan without guarantees. The loan had also been much higher than the Savings Bank could afford.

The four members of the Board of Directors of SPRON are:

Margret Gudmundsdottir is the CEO of Icepharma, one of the leading companies in Iceland in the healthcare market and represents brands like Baxter, Bayer, Lilly, Merck Serano, Mylan, Pfizer, Roche, Johnson & Johnson, CSL Behring, Biomet, Coloplast, Hill-Rom, Hospira, Smith & Nephew and Nike, to name a few. She is also the Chairman of the Board of N1, Iceland’s biggest fuel retail and service company. Ms. Gudmundsdottir worked for N1 main competitor, Shell, for 10 years and was a director at Q8 in Denmark and is on the board of the Federation of Icelandic Trade, before she joined Icepharma.

Rannveig Rist is the CEO of Rio Tinto Alcan in Iceland. She has been on the Board of Directors of HB Grandi, Confederation of Icelandic Employers, Iceland Drilling and Skipti. She was also at Promens and Director of the Icelandic Chamber of Commerce. Ms. Rist is a Lecturer at the University of Iceland.

Johann Asgeir Baldurs is the Chairman of the Board at Frumherji, the leading company in Iceland in inspecting, testing and legal metrology in Iceland. He was the CEO of VIS, Iceland´s largest insurance company and a member of the Board of Directors at IGI Group, Lysing financing company and was the Chairman of the Board of Viking Redningstjenese A/S in Norway.

Ari Bergmann Einarsson, investor, was a Branch Manager for SPRON Savings Bank and now works as and independent investor.

The court case will continue at the District Court in Reykjavik for the next few weeks.