More former heads of collapsed Iceland bank arrested: report

11th May 2010, Comments 0 comments

Two former heads of collapsed Icelandic bank Kaupthing were arrested just days after two other former executives at the bank were taken into custody, public broadcaster RUV reported Tuesday.

Former head of the bank's domestic operations, Ingolfur Helgason, and former chief risk officer Steingrimur Karason were arrested late Monday on arrival from Luxembourg, where they both live, RUV said.

They were both briefly questioned early Tuesday before being detained, the broadcaster added.

Last Thursday, former Kaupthing boss Hreidar Mar Sigurdsson, along with Magnus Gudmunsson, who headed the bank's unit in Luxembourg, were taken into custody.

Sigurdsson and Gudmunsson, who also reside in Luxembourg, are both still being held.

Prosecutor Olafur Hauksson said at the time of the first arrests that the investigation concerned allegations of "economic criminality" and the "offence against laws about security trading, including market manipulation, and finally a breach of trading laws."

His office asked for the two men to be held in custody for two weeks "to ensure the interests of the investigation."

Iceland suffered a massive blow in late 2008 when its three largest banks -- Kaupthing, Landsbanki and Glitnir -- collapsed and were taken over by the state during the global financial meltdown.

The former bank heads helped bring about the downfall by taking "inappropriate loans from the banks," a parliamentary inquiry into the collapse found.

© 2010 AFP

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