Icelandic seafood processing tech company Vélfag is about to make 30% of its workforce redundant as it faces sanctions related to a former shareholder, Russian seafood group Norebo, one of two companies sanctioned by the EU, Norway and Iceland.
The company states that the measures taken by Arion Bank and Iceland’s Ministry of Foreign Affairs are ‘unprecedented and hostile’ and that the shareholders, board and management have taken the step of implementing an immediate 30% reduction in staff as the first step in an emergency plan.
‘The termination of employment contracts marks the initial phase of this plan, which was adopted in response to the sanctions imposed by Arion Bank and the Icelandic Ministry of Foreign Affairs. The measures are intended to ensure the company’s survival until [Minister of Foreign Affairs] Thorgerður Katrín Gunnarsdóttir decides either on the formal expropriation of the majority shareholder or on the lifting of the sanctions,’ a representative of the company stated.
Vélfag states that its current ownership is in the hands of the company’s founders, who own 18% of shares, while the remaining 82% of the shareholding is owned by Titania Trading Limited (TTL), based in Hong Kong, which is fully owned by a Swiss investor.
Majority shareholder Ivan Nicolai Kaufman has been quoted as stating that Norebo has no connection to the management of Vélfag, describing the handling of this issue as ‘unprofessional’.
‘It is deeply alienating that a country aspiring to join the European Union has yet to grasp the definition of the rule of law and the core European values—such as property rights. This disregard now results in numerous families in Iceland losing their livelihoods. I doubt it was worth it, and I know it helps no one,’ Vélfag’s majority shareholder said.
