REYKJAVIK, July 7 (Reuters) - Kaupthing’s former chief executive, chief financial officer and two others have been indicted by Iceland’s special prosecutor for fraud and breach of trust in the run-up to the 2008 collapse of the bank.
According to the indictment, former CEO Hreidar Sigurdsson and former CFO Gudny Sveinsdottir have been charged with fraud related to financial transactions made in 2007. Magnus Gudmundsson, former managing director of Kaupthing Luxembourg and Skuli Thorvaldsson, an investor, have also been indicted for taking part in the alleged crimes.
Iceland’s top three banks collapsed under huge debts when the global credit crunch struck and the country’s special prosecutor has pursued cases against some of the banks’ former employees for their roles in the crisis.
The alleged fraud relates to the transfer of 6 billion Icelandic crowns ($53 million) from Kaupthing to Marple Holdings, an entity under Thorvaldsson’s ownership, and the subsequent purchase of bonds by Kaupthing from Marple.
Kaupthing lost a significant amount of money due to the purchase of the bonds, according to the indictment.
The special prosecutor has requested imprisonment for all four. A date for the trial has not yet been set.
This is the fourth time Sigurdsson and Gudmundsson have been charged by the special prosecutor.
They were both convicted late last year for market abuses related to a large stake taken in the bank by a Qatari sheikh just before the bank’s collapse. The two, now based in Luxembourg working as financial consultants, have appealed the decision.
$1 = 114.0150 Icelandic Kronas Reporting by Robert Robertsson, writing by Mia Shanley; Editing by Toby Chopra