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Bank chiefs behind bars in Iceland

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Bank chiefs behind bars in Iceland

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A court in Iceland has remanded in custody two banking executives as part of its investigation into the collapse of Kaupthing Bank.

Former chief executive Hreidar Mar Sigurdsson is to be held for 12 days while Magnus Gudmundsson, who headed the bank’s Luxembourg operation is to be detained for seven.

They are suspected of embezzlement, market manipulation and forgery.

The detentions were requested by special prosecutor, Olafur Hauksson. They are the first high profile arrests of his investigation into possible wrongdoing in the lead-up to Iceland’s financial meltdown.

The Icelandic government was forced to nationalise Kaupthing, Landsbanki and Glitnir in 2008 when they collapsed under a mountain of debt.

The country is now surviving on aid from the IMF and its Nordic neighbours.