The ex-CEO and ex-chairman of Icelandic bank Kaupthing have been jailed for their roles in fraud and manipulation days before the bank’s collapse.
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Hreidar Mar Sigurdsson, Kaupthing’s former chief executive and Sigurdur Einarrson, the former chairman have been sentenced by a Reykjavik court to five-and-a-half years and five years in prison respectively for fraud and manipulation.
The sentences are related to the acquisition of a 5% stake in Kaupthing in September 2008 by Sheikh Mohammed Bin Khalifa Bin Hamad Al-Thani of Qatar, shortly before the Icelandic banking collapse.
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By GlobalDataIt was later revealed that the bank itself lent the Sheikh the money to buy the stake, in a case that has similarities with Barclays deals in the Arab country.
The court also gave Olafur Olafsson, one of the majority stakeholders, three years and Magnus Gudmundsson the ex-CEO of Kaupthing’s Luxembourg business, three and a half years.
Iceland launched a series of criminal cases against top managers in the three main Icelandic banks after the financial meltdown in 2008 (Kaupthing, Landbanksi and Glitnir).
The three main banks turned to be collectively 10 times the size of the economy of the country.
Olafur Hauksson, Iceland’s special prosecutor, is currently leading the charges against banks top managements, the former boss of Glitnir was the first to be convicted one year ago.
Before the collapse, Kaupthing was the biggest Icelandic bank and seventh largest Nordic one, operating in 13 countries including the U.K, the US, Qatar and the Netherlands.
The group had 36 retail branches in Iceland and 3,300 employees and subsidiaries in Denmark, Sweden, Luxembourg, UK, Finland and Norway as well as 16 other subsidiaries and branches around Europe, North America, Asia and the Middle East.
Both Sigurdsson and Einarrson are expected to appeal against their sentences.
Al-Thani, who had the bank’s loan deposited it into a company he part-owned with Olafsson, said he had not known of Olafsson’s involvement in the and felt he had been deceived.
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