How private homes are now being investigated by SFO

Posted 27/01/2010 - 12:08 by glen07

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2010-01-25 13

Icelandic tycoons at centre of SFO raids

Serious Fraud Office carries out series of raids on offices of firms linked to Lýdur and Ágúst Gudmundsson

  •, Tuesday 26 January 2010 20.37 GMT

Simon Bowers

The Serious Fraud Office and counterparts from Iceland carried out a series of co-ordinated raids today on the offices of companies linked to Icelandic tycoons Lýdur and Ágúst Gudmundsson, including the Lincolnshire headquarters of Bakkavor, one of Britain's largest chilled food suppliers.

Before the banking sector meltdown brought the small north Atlantic island's economy to its knees in October 2008 the Gudmundsson brothers, both of whom have homes in Belgravia, were among Iceland's most influential and wealthy entrepreneurs. The holding company Exista, in which they hold a near-45% stake, was the largest shareholder in Kaupthing, Iceland's biggest bank, before its collapse.

But yesterday's raids are understood to be focused on other alleged activities at Exista. Among the actions under scrutiny is the sale of a major stake in Bakkavor by Exista to the Gudmundsson brothers shortly after the banking meltdown.

Raids in the UK were conducted by the SFO and British police at four addresses, including Exista offices in Paddington, at the request of Icelandic prosecutors and do not relate to investigations being pursued by UK authorities. Inquiries were sparked in part by a dossier on Exista that was passed to criminal prosecutors by administrators to Kaupthing.

Intelligence exchanges between the SFO and the Office of Iceland's Special Prosecutor Ólafur Hauksson have been building for months, but searches at UK addresses mark a new level of collaboration. Hauksson said he expected more UK raids to follow, relating to other inquiries in Iceland.

Meanwhile, Hauksson's team today carried out simultaneous raids at eight addresses in Iceland linked to Exista. In addition to their own lines of investigation, Icelandic prosecutors were carrying out a formal search request from the SFO relating to their inquiry into past activities at British sportswear retailer JJB.

A joint venture between Exista and businessman Chris Ronnie jointly acquired a 29% stake in 2007 in a deal financed by Kaupthing. Ronnie was later appointed to the JJB board, quickly becoming chief executive. He was suspended last year after it emerged the stake had been seized by administrators to Kaupthing.

The SFO announced in September that it is investigating suspected criminal price-fixing and fraud in the sportwear retail industry. It is focusing its attention on Sports Direct as well as JJB. JJB has negotiated immunity in exchange for whistle-blowing co-operation.

Bakkavor, the launchpad for the Gudmundsson brothers, began as a sleepy fish roe processing firm. In a series of Kaupthing-brokered takeovers in the UK it swallowed Katsouris Fresh Foods — a company five times its size in 2001, and four years later bought Geest,making it one of the largest suppliers of ready meals, pizzas, desserts and sliced fruit to Britain's supermarkets. A year later Laurens Patisseries was acquired from serial entrepreneur Andreas Liveras.