If you are a local government treasurer and you got caught with a load of cash in Landesbanki, Kaupthing or any other Icelandic Bank then you deserve no sympathy. In fact you should be flogged by your local tax payers.

You were trusted with tax payers money because you are a professional fund manager. You were not the honorary treasurer collecting the Xmas kitty for the local mothers union. As a professional you should have known your job. Anyone who knows anything about economics or ooccasionallyy glances at the FT should have understood that Iceland was the ultimate hot money trade that carried a lot of risk. There have been rumours about the solvencyy of the Icelandic Banks for months and CDS spreads illustrated that this risk was increasing on a continuous basis.

Admittedly they offered a better interest rate that the British Banks but there was a good reason for that. It’s called a risk premium. Its the first principle you learn in A level economics. If you were managing money on behalf of a risk averse local authority you should not have been able to spell Iceland let alone Kaupthing. To have been investing money with them to earn a meagre 0.25% or 0.5% more each year was simply crazy.

When the government bails out the local authorities I hope they make an example out of their treasurers as they have done with the reckless bankers.

Robert Tchenguiz was widely reported to have lost a £1bn in 24 hours, earlier this week, as he was forced to crystalize his loss making stakes in M&B and Sainsbury’s. These stakes have been loss making for quite sometime but he was forced to liquidate the positions as his financiers, Kaupthing, recalled their loans to meet their own financial difficulties.

Robert is a professional investor and a big boy so I am sure he does not expect sympathy for his plight. However, I do find it odd that the press and the financial community seem to have taken great delight from his demise. He and his brother, Vincent, may not be everyone’s cup of tea but I have always found them to be hard working, energetic and entrepreneurial. Hardly characteristics to be despised or deplored.

I understand why the press have castigated short sellers who profit from the distress of others and make fortunes as Joe Publics pension value evaporates. However, Robert Tchenguiz has taken a very different approach. In both M&B and Sainsbury’s he saw an opportunity to create value from changing the companies strategic approach to their real estate assets. He campaigned aggressively, especially at M&B, to affect these changes but he certainly put his money were his mouth was. He took enormous stakes and hoped to engage the board in a strategy that he perceived would boost the share price.

His ideas, based on splitting the operations and the property assets and applying leverage, may not have been popular but he was certainly not looking to bust these companies or profit from a slump in the share price. As a major shareholder, he was doing his bit to champion shareholder value hoping to boost and his personal wealth in the process. 

Surely we should applaud entrepreneurs who invest their personal fortune in trying to improve businesses rather than celebrating their downfall. Sympathy may not be required neither is taking pleasure from his pain.