Iceland’s Special Prosecutor Raids Byr and MP Bank Skip to content

Iceland’s Special Prosecutor Raids Byr and MP Bank

Employees of the office of the Special Prosecutor, responsible for investigating the banking collapse, searched the headquarters of savings bank Byr and MP Bank yesterday due to suspicion of violations of the general penal code on fraud and embezzlement.

According to Special Prosecutor Ólafur Thór Hauksson, the house searches were extensive and lasted for nine hours, during which documents and electronic data were confiscated. Questioning took place alongside the raids, which will continue this week, Morgunbladid reports.

In addition to 20 employees of the Special Prosecutor’s office, police officers from the capital region participated in the raids. “Employees of the Capital Region Police forensics department assisted us and were responsible for confiscating electronic data, among other things,” Hauksson explained.

In late October, Morgunbladid reported that the Icelandic Financial Supervisory Authority had referred a case to the Special Prosecutor in relation to loans that Byr had granted to the holding company Exeter.

The loans were granted in October and December 2008 and were worth a total of ISK 1.1 billion (USD 8.9 million, EUR 6 million). They were used for buying 1.8 percent of Byr’s capital stock at a premium price. No down payments have been made.

At that time, the market on capital stock was closed and the price of the shares had plummeted. Those who sold the shares were, among other parties, MP Bank and two of Byr’s board members, Jón Thorsteinn Jónsson and Birgir Ómar Haraldsson.

MP Bank had acquired its shares, among other means, after a margin call on a holding company owned by Ragnar Z. Gudjónsson, directors of Byr’s savings banks operations, and other Byr executives.

MP Bank released a statement because of yesterday’s raid, saying that the house search was directed towards “certain customers of the bank but not the bank itself or its employees.”

Byr also released a statement saying that the investigation will not influence the savings bank’s operations. It is hoped that the investigation will eliminate all doubt in relation to this case.

Click here to read more about the Special Prosecutor’s investigation.

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