Kaupthing: the next moves?
With two of Kaupthing’s key managers in custody the question is how the investigation will move from here. According to sources in Iceland, Kaupthing’s former executive chairman Sigurdur Einarsson has been called in next week by the Office of the Special Prosecutor but it will not be clear until it happens if the OSP makes a further move this time.
With the ex-manager of Kaupthing Luxembourg now in custody and recent extensive house searches in Luxembourg, under the auspice of the Luxembourg police, the sphere of the investigation has now moved beyond Iceland. It’s been clear to everyone who has studied Kaupthing’s operations that the subsidiary in Luxembourg played an important role.
Wealthy Icelandic clients were encouraged to set up companies there in order to make use of tax avoidance schemes. In several cases the bank’s main shareholders seem to have had companies there in order to hide ownership, i.a. to avoid take-over regulations. In other cases that have raised questions in Iceland money and ownership often seems to disappear in Luxembourg since the tiny country can so easily be the gate to off-shore jurisdictions. Many of the big loans that Kaupthing gave its main shareholders and core clients went through Luxembourg.
With the importance of Luxembourg in mind and the fact that Kaupthing is already being investigated in Iceland and by the Serious Fraud Office it would make sense if an investigation would also be set up in Luxembourg. A combined investigation in the three countries where Kaupthing had its core operations would no doubt speed up the process in an otherwise lengthy and time-consuming investigation.
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