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Iceland's special prosecutor has taken Larus Welding, the former head of the failed Glitnir Bank, into custody, Reuters reports.
Glitnir Bank was the first of the top three Icelandic commercial banks to fail in 2008.
Former director of market trade Jóhannes Baldursson and former broker Ingi Rafn Júlíusson were also taken into custody and between ten and twenty other former employees of Glitnir Bank were also investigated.
They are expected to be held for a week, apparently to prevent tampering with evidence or witness coercion.
Read more: http://articles.businessinsider.com/2011-12-01/europe/30461990_1_glitnir-bank-icelandic-usd#ixzz1gMSrqquH
REYKJAVIK | Wed Nov 30, 2011 5:07pm EST
(Reuters) - Iceland's special prosecutor arrested the former chief executive of Glitnir Bank on Wednesday and questioned nearly two dozen people related to the collapse of the bank in 2008.
Glitnir Bank was the first of Iceland's top three commercial banks to collapse three years ago, imploding under the weight of huge debts racked up during years of aggressive expansion.
Special prosecutor Olafur Hauksson said his office had made several arrests on Wednesday -- the first for activities related to Glitnir. He told local media that former CEO Larus Welding would be held in custody for up to one week.
'Welding is being held in the interest of the investigation in order to prevent him for influencing other suspects or removing evidence that we're after,' he was quoted as saying by Morgunbladid.
Hauksson said he had initiated nine new investigations, made several arrests and questioned nearly two dozen people related to the fall of Glitnir.
Inquiries are being made into the purchase of Glitnir's shares, as well as into loans provided to a number of firms to purchase Glitnir shares. It also investigated a 15 billion Icelandic crown ($126 million) guarantee provided by Glitnir in connection with a share offering in FL Group.
The prosecutor has also been conducting investigations at Kaupthing and Landsbanki. Kaupthing, Landsbanki and Glitnir all collapsed in the space of a week during the 2008 crisis.
(Reporting by Omar Valdimarsson)
Glitnir
http://www.glitnirbank.com/
Description
Glitnir was an international Icelandic bank. It was created by the state-directed merger of the country's three privately held banks - Alþýðubanki (Union Bank), Verzlunarbanki (Bank of Commerce) and Iðnaðarbanki (Industrial Bank) - and one failing publicly held bank - Útvegsbanki (Fisheries Bank) - to form Íslandsbanki in 1990. At the time, Íslandsbanki was the only major privately held commercial bank in Iceland. It was publicly listed on the Iceland Stock Exchange, in 1993. Íslandsbanki subsequently merged with FBA Icelandic Investment Bank in 2000.
On 20 February 2009, in light of the Icelandic financial crisis, the bank’s name was changed back to the original Íslandsbanki.
By 15 October 2009, it was decided that 95% of the new Íslandsbanki would be taken over by the creditors of Old Glitnir, while the government of Iceland would retain ownership of the remaining 5%.
Sources of Information:
- http://en.wikipedia.org/wiki/Glitnir_%28bank%29
Read more: http://www.businessinsider.com/blackboard/glitnir#ixzz1gMTSIOHt
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