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A million lost in bank crash

PUBLISHED: 17:09 11 February 2009 | UPDATED: 09:44 11 August 2010

A COMPANY hired by the council to dispose of rubbish in the borough lost £1million in the Icelandic banking crisis. The East London Waste Authority (ELWA) invested the large sum in Heritable Bank in 2007 which was ultimately owned by Landbanski. Landbansk

A COMPANY hired by the council to dispose of rubbish in the borough lost £1million in the Icelandic banking crisis.

The East London Waste Authority (ELWA) invested the large sum in Heritable Bank in 2007 which was ultimately owned by Landbanski.

Landbanski went bust in 2008 when they were hit by the credit crunch, Chairman Eggert Magnusson, who also owns the West Ham football team, went from billionaire to penniless overnight.

The information came to light at a meeting in Dagenham Civic Centre on February 2, where the four councils who use ELWA reviewed their budget.

Money to pay the company, which recycles, treats and disposes of waste, comes from the council's net budget general fund, made up from council tax, fees and charges and other sources like government grants.

The loan of £1m that was made to Heritable Bank for 364 days was part of the company's investment portfolio.

It was known to bosses that the bank was ultimately owned in Iceland.

ELWA treasurer, Geoff Pearce, said the bank was profitable at the time and had a very high credit rating.

Administrators dealing with the Heritable Bank have told ELWA they will get a "material sum" of money back.


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