Perth and Kinross Council still hopes for full recovery of Glitnir Bank investment

Feb 12 2010 by Alison Anderson, Perthshire Advertiser Friday

ICELAND’S Glitnir Bank is at loggerheads with Perth and Kinross Council over efforts to recover money deposited with the doomed bank.

The £1million invested in Glitnir by Perth and Kinross Council was modest in comparison to other councils’ deposits in the bank, which went bust 18 months ago at the onset of the world-wide financial meltdown.

The protracted battle to recoup the funds is in the hands of CoSLA and the LGA – Local Government Association – and hopes had been high that local authorities would be given priority status under Icelandic law with the probability of full recovery.

But PKC’s strategic policy and resources committee was told this week that aim had not been forthcoming, and a potentially lengthy legal battle is likely.

The update was given by council leader Ian Miller, who said: “The LGA is challenging the view of the bank’s wind-up board that local authorities do not have priority status.”

He explained Glitnir’s stance was contrary to a precedent set by another failed Icelandic bank which had recognised local authorities‘ claims.

He continued: “Our ultimate expectations to get all our money back have not changed.”

In the meantime, explained Mr Miller, the council was budgeting on only a 31% return of investment – a potential worst case scenario should the Icelanders remain firm in their ‘non priority status’ stance.

Opposition leader Alexander Stewart said: “It’s very disappointing that Glitnir has taken this stance and it’s very important that the message goes out from here that we are attempting to resolve the situation and get back our full investment.’’