FL Group Suspected of Extensive Embezzlement Skip to content

FL Group Suspected of Extensive Embezzlement

The economic crime department of the National Commissioner of the Icelandic Police is investigating a transaction of ISK 3 billion (USD 24 million, EUR 18 million) from Icelandic investment company FL Group to the account of Kaupthing in Luxembourg.

Copyright: Icelandic Photo Agency.

This was confirmed by Helgi Magnús Gunnarsson, prosecutor of economic crimes, in an interview with Morgunbladid. He said the economic crime department is now working on obtaining data from Luxembourg about this case.

“The question is whether this money was in FL Group’s account in Luxembourg or if it was used for something else,” Gunnarsson said.

Former CEO of FL Group Ragnhildur Geirsdóttir mentioned the transaction in a statement that she released to the media yesterday.

Geirsdóttir said she had never received satisfactory explanations for the transaction from Hannes Smárason, who served as FL Group’s chairman at the time of the transaction, but that she had seen data showing that the ISK 3 billion had at some point gone to the investment company Fons.

Gunnarsson said the investigation of this case had begun some time ago—last year raids were undertaken in facilities connected to Smárason. According to Morgunbladid’s sources, the investigation is first and foremost directed towards Smárason, who ordered the transaction.

Pálmi Haraldsson, former majority owner of Fons, said this amount was never transferred to his company’s account but would otherwise not comment on Geirsdóttir’s statement.

The transaction took place around the same time that Fons acquired the airline Sterling. Geirsdóttir said she doesn’t know whether the amount had anything to do with the acquisition.

In earlier reports, Morgunbladid has speculated on the possibility that FL Group participated in Fons’s Sterling acquisition, a claim Smárason has always denied.

DV recently reported that Geirsdóttir had been paid to not comment on her reasons for leaving FL Group in 2005.

Geirsdóttir denied that claim in an interview on RÚV’s news magazine Kastljós yesterday, saying that the reason she quit was because she couldn’t work with Smárason; she didn’t like his attitude, which could be described as: “This is mine, I can do this.”

Click here to read more about Hannes Smárason.

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