Transaction of ISK Billions Investigated in Iceland Skip to content

Transaction of ISK Billions Investigated in Iceland

Iceland’s Special Prosecutor conducted raids at five locations in Reykjavík, including the Central Bank, and arrested four former employees of Landsbanki yesterday in connection with his investigation of a transaction worth ISK 35 billion (USD 298 million, EUR 220 million) made by Landsbanki on October 6, 2008, the day the emergency law took effect in Iceland and the day before the bank was taken over by the Financial Supervisory Authority.


Landsbanki’s headquarters in Reykjavík. Photo by Páll Stefánsson.

Those arrested were Jón Thorsteinn Oddleifsson, former director of the bank’s asset management, Thórir Örn Ingólfsson, former supervisor of the bank’s risk management, Hannes Júlíus Hafstein, former manager of investment banking at the bank’s legal division and Stefán Hédinn Stefánsson, former board member of Landsbanki’s Landsvaki and current assistant director of Saga Investment Bank. They were all released after questioning last night. Close to 20 people were questioned as part of the investigation, reports.

The investigation is on the one hand directed towards transactions from Landsbanki’s account in the Central Bank to MP Bank and Straumur due to a repurchase agreement with the Central Bank.

According to Fréttabladid’s sources, ISK 7.2 billion (USD 61 million, EUR 45 million) was transferred to Straumur and ISK 7.4 billion (USD 63 million, EUR 47 million) to MP Bank.

On the other hand, Landsbanki’s purchase of nearly ISK 20 billion (USD 171 million, EUR 126 million) worth of its own shares and those of Straumur made with Landsvaki’s funds after the fund was closed is also under investigation.

Questioning over Sigurjón Th. Árnason, former CEO of Landsbanki, continued yesterday, from approximately 11 am to 10 pm. Questioning will continue today. Árnason will remain in custody until January 25, Morgunbladid reports.

Click here to read more about yesterday’s raids and the Special Prosecutor’s investigation of Landsbanki.

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