Friday, October 2, 2009

PWC & KPMG under police investigation in Iceland

The Telegraph reports today (here) that Police have raided the offices of KPMG and PricewaterhouseCoopers (PwC) in Reykjavik, seizing documents and computer data as part of an investigation into alleged criminal activity at three collapsed Icelandic banks.

These two companies are employed by the Isle of Man. PWC is involved as liquidator of KSFIoM and KPMG is involved in the management of the Depositors Compensation Scheme. They are 2 of the top 4 international auditing companies & their services do not come cheap as the dispossessed depositors have found out to their cost. To those who are the victims of the failed Kaupthing bank these two companies are despised more than traffic wardens & bent coppers.

Why should this be so? Because as the Chairman of KPMG UK says: "Our vision is simply stated to turn knowledge into value for the benefit of our clients.." It is the depositors who are having to pay the cost.

These companies operate in the world of money like vultures scavanging off the carcass of companies that have gone bust, and they do so at the expense of hapless customers who are owed money but end up being left with the bare bones.

No doubt PWC & KPMG operating on the IoM will cry: "we are squeaky clean." Kaupthing depositors sure hope that they are, though KPMG haven't exactly shown themselves to be competent in the way they have handled the DCS payments.


  1. You've missed the point spectacularly, Jim. The issue isn't that KPMG and PwC are being investigated for collusion in fraud; it's that it's becoming clear that there was fraud at Kaupthing hf in the first place. If it can be proved that the directors of Kaupthing hf conducted themselves in a criminal fashion, heavy pressure can be brought on Iceland to stand behind the bank's parental guarantee and repay KSF depositors their money.

  2. Sir/Madam,
    I am not sure how your comment ties in with what the Telegraph quoted, namely: "22 policemen and six foreign accountants took part in the searches yesterday. The purpose of the searches was to look for and secure evidence related to the investigation of several charges which have been investigated by the office," the statement said.

    Among the matters being investigated are "violation of laws on accounting and annual reports, violation of laws on financial institutions and securities transactions and violations of laws on public limited companies".

    Whilst there is dispute as to whether the parental guarantee has any legal force, it certainly had moral authority. I believe a court of law would uphold that the guarantee that was given could be shown to have legal standing. In any event tthe absence of such a ruling there can be no doubt that the Icelandic government is morally bound to honour the parental guarantee given to KSFIoM.

  3. The Isle of man and UK governments, and the hangars on who milking our savings prove that there aren't any morals when it comes to the treatment meted out to KSFIoM depositors. The press announcement on the Kaupthing Singers Isle of Man website starts "In order to protect the interests of depositors..." In the past year I've seen no evidence of that.