Star magistrate warns of intense Iceland bank probe

14th May 2010, Comments 0 comments

No stone will be left unturned in a probe into the 2008 collapse of Iceland's major banks, anti-corruption investigator Eva Joly told Icelandic media.

"There is nothing we won't look into," the Norwegian-French magistrate, who once spearheaded a probe into one of France's biggest corruption scandals, told online news website in an interview published late Thursday.

Since Iceland's three largest banks -- Kaupthing, Landsbanki and Glitnir -- collapsed in 2008, almost dragging down the country's economy with them, their former executives and owners have largely been living untroubled lives abroad.

But a parliamentary inquiry into the nation's profound financial and economic crisis signaled a turning of the tide. Published last month, it laid much of the blame for the downfall on the former bank heads who had taken "inappropriate loans from the banks" they worked for.

Over the past week, a number of former top Kaupthing bankers have been arrested while former executives and owners of Glitnir face a two-billion-dollar (1.6-billion-euro) lawsuit.

They are suspected of fraud and robbing the banks "from the inside."

"We had to start somewhere and Kaupthing was the biggest bank," said Joly, who last year was appointed by the Icelandic government as a special advisor to the Icelandic investigation into the financial melt-down.

The probe, she said, would surely be widened significantly and would certainly include Iceland's third failed bank Landsbanki.

"What I'm saying is that everything will be investigated," she said.

"It would be unacceptable if lack of human resources would only lead to a investigation of one bank ... More cases will follow suit," she added.

The main prosecutor, Olafur Hauksson, has repeatedly complained not enough money has been set aside for an investigation of the magnitude he is dealing with.

In the Kaupthing case alone, he announced late Thursday that at least 20 former executives were considered suspects.

Four former Kaupthing executives, including former chief executive Hreidar Mar Sigurdsson, have been arrested in the past week as they arrived in Iceland from Luxembourg, where they live.

Interpol has issued an international arrest appeal for that bank's ex-chairman, Sigurdur Einarsson, who lives in London.

Administrators of Glitnir's liquidation announced Wednesday they had filed a lawsuit in New York against the bank's former largest shareholder Jon Asgeir Johannesson, along with other former stakeholders and executives for "fraudulently and unlawfully draining more than two billion dollars out of the bank."

© 2010 AFP

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