Britain's Serious Fraud Office

[Guest A Friend]

Police have arrested nine people, including two of Britain's

wealthiest entrepreneurs, on suspicion of fraud in connection with the

2008 collapse of Iceland's Kaupthing bank during the global financial

crisis.

 

Britain's Serious Fraud Office said seven men aged between 42 and 54 were

held in raids on two businesses and eight homes in London. The properties

were being searched and the suspects questioned at police stations in the

city. Two men, aged 42 and 43, were arrested in the Icelandic capital,

Reykjavik.

 

Entrepreneurs Robert and Vincent Tchenguiz confirmed they were among those

arrested in London and said they were "cooperating fully" with

authorities.

 

A police van was parked outside the office of the brothers' investment

firm, Rotch Property, in the upmarket Mayfair area.

 

The Tchenguiz brothers amassed a large property portfolio and had

investments in some of Britain's best-known retail brands, including

grocer J. Sainsbury PLC and pub chain Mitchells & Butlers.

 

But the business borrowed more than 1 billion pounds ($1.62 billion) from

Kaupthing, and was plunged into crisis when the bank collapsed.

 

Icelandic media said former Kaupthing chairman Sigurdur Einarsson was also

arrested in London.

 

Britain's fraud office is investigating whether Kaupthing made false

claims while trying to attract British investors to its "high yield"

deposit account, Kaupthing Edge.

 

It is also looking at why "substantial value" was taken out of the bank

shortly before it collapsed.

 

Iceland's economy imploded when Kaupthing and the other major banks

collapsed under the weight of huge debt in the early days of the world

financial crisis.

 

Prosecutors have already made several arrests in Iceland as they

investigate suspected market manipulation and fraud in the run-up to the

banking crash.