Regarding the election of the board at the Annual General Meeting of Haga hf. on 9 June 2020

Regarding the election of the board at the Annual General Meeting of Haga hf. on 9 June 2020

In light of media coverage of the election of the board at Haga's annual general meeting earlier today, the Competition Authority considers it appropriate to provide the following information:

On 11 September 2018, the Competition Council and Hagar signed an agreement regarding Hagar's acquisition of Olíuverzlun Íslands hf. (hereinafter the agreement). The agreement aims, among other things, to counteract the harmful effects of joint ownership of companies, address the competition concerns related to the integration of the fuel and grocery businesses resulting from the merger, and improve and thereby increase access to wholesale fuel and the storage capacity for fuel and services of Olíudreifing hf.

Article 22 of the agreement provides, inter alia, for the competitive independence of the Haga board, and Article 21 deals with the disqualification of Olíudreifingar's board members in relation to Haga.

On 5 June, Hagar hf. announced its candidacy for the company's board of directors, to be elected at its general meeting on 9 June 2020. The announcement stated that among the candidates for the board was Eva Bryndís Helgadóttir, a lawyer, who was also among the candidates recommended by the nomination committee for election to the board. Eva Bryndís has served as Chairwoman of the Board of Olíudreifing hf. The nomination committee's justification stated, among other things, that Eva Bryndís's position as chair of the board of Olíudreifingur ensured knowledge of the fuel market, as well as of the settlement between Haga and the Competition Authority no. 9/2018.

According to official information from the Companies Register of the Director of Tax Administration, Eva Bryndís was still the registered chairperson of Olíudreifing yesterday, 9 June 2020.

In light of the proposed election of directors at Hagar's annual general meeting, the Competition Authority considered it appropriate to draw the Haga board's attention to the fact that it would clearly contravene the terms of the settlement for the same individual to sit on the boards of both Haga and Olíudreifing. Furthermore, it should be borne in mind that the objective of the settlement (and of the authority's earlier decisions) was, among other things, to ensure the independence and impartiality of Olíudreifingur towards its owners. Should the Chairman of Olíudreifing be elected and subsequently resign from its board, it would nevertheless be given serious consideration whether her membership of the board of Hagka would pose a risk of sensitive information being passed from Olíudreifing to Hagka in contravention of the objectives of the settlement.

In the Competition Authority's communications with the CEO of Haga yesterday, it was stated that the authority would not oppose an election for the board taking place at the company. However, should Eva Bryndís be elected to the board, the Competition Authority would consider whether her appointment would contravene the provisions and objectives of the settlement between the authority and Haga.

Despite the Competition Authority's aforementioned position, Hagar announced of its own accord last night that the company's board intended to request at the annual general meeting that the election of the board be postponed and that the company's nomination committee be tasked with commencing its work again.

Shortly before the general meeting, the association requested further confirmation from the Competition Authority that it had no objection to the election for the board of directors taking place. The Competition Authority responded quickly to this request with an email sent at the start of the general meeting, in which it was also emphasised that should the authority deem Eva Bryndís unfit to sit on the company's board due to her previous employment with Olíudreifing, this would not lead to a penalty decision, so long as Haga took action and a new individual was elected to the board.

The results of the Haga Annual General Meeting are now available. Elections for the company's board of directors were held, and among the new directors is Eva Bryndís Helgadóttir. The Competition Authority will now independently review whether her position on the board contravenes the provisions and objectives of the existing settlement between the authority and Haga.