Iceland prosecutor indicts ex-Landsbanki executives over loans

landsbankiTwo former Landsbanki chief executives have been indicted by Iceland’s special prosecutor for allowing it to guarantee loans despite lacking sufficient insurance.

Iceland’s financial system collapsed in 2008, and the country employed a special prosecutor to look into whether bankers were complicit in the failing. Several former bank executives have already been tried and convicted.

In the indictment, Elín Sigfúsdóttir and Sigurjón Árnason are charged with jeopardising the bank by allowing it to guarantee loans by Kaupthing Bank to two Panama-registered firms for 13.6bn Icelandic crowns (around $200m) before the financial crisis. The indictment states that they violated their positions because they did not have sufficient insurance to act as they did.

Sigurjón claimed he did nothing wrong but gave no further comment, while Elín was unavailable for comment.

Sigurjón was CEO of Landsbanki from 2003 to October 2008. Elín was the managing director of corporate finance before taking over as CEO in October 2008 – a position she held until January 2009.

In 2013, the special prosecutor indicted Sigurjón Árnason and Halldór Kristjánsson, the joint CEO at Landsbanki, and four other former employees of the bank for alleged manipulation of its share price in the months leading up to the 2008 financial crash. All the defendants pleaded not guilty.