Panama Papers | Icelandic PM faces vote of no confidence

Iceland’s prime minister Sigmundur Davíð Gunnlaugsson has come under fire and is being pressured to step down after leaked documents in the far-reaching Panama Papers scandal, revealed that his wife owned a secretive offshore company with a potentially multimillion-pound claim on the country’s collapsed banks.

The Panama Papers were released on Sunday and they revealed among others that the prime minister and his wife Anna Sigurlaug Pálsdóttir, bought a British Virgin Islands-based company from Mossack Fonseca, the Panamanian law firm at the centre of the leak, in 2007 to invest money from the sale of Pálsdóttir’s share of her family’s business.

Gunnlaugsson sold his 50% of the company to Pálsdóttir for $1 at the end of 2009, soon after he was elected as an MP for the first time and a year after the financial crisis that plunged the country into a devastating depression. He has never declared an interest in the company.

The Guardian reports that since he became prime minister in 2013, Gunnlaugsson directed negotiations with the creditors of the three big Icelandic banks that collapsed during the 2008 crisis – while knowing, the leaked documents show, that his wife’s offshore company, Wintris Inc, which lost 515m kronur in the crash, was owed a sizeable sum from their bankruptcies.

Opposition parties have, as a result, called a vote of no confidence in Gunnlaugsson, after they claimed that the company represents a “major conflict of interest.”

Reports add that crowds of as many as 10,000 protesters gathered outside parliament in central Reykjavik for an evening protest, chanting and banging drums, while others waved bananas, symbolising the belief that they were living in a banana republic.

According to media sources, protesters voiced concerns about how the prime minister has lost credibility after keeping his assets secret. Earlier this week, Gunnlaugsson walked out of an interview with Swedish television company SVT after he was is asked about a Wintris, insisting it had been fully declared to the Icelandic tax authority.

The prime minister’s office now says his shareholding was an error due simply to the couple having a joint bank account, and “it had always been clear to both of them that the prime minister’s wife owned the assets”. The transfer of ownership was made as soon as this was pointed out, a spokesman said.

He has said the assets were not “hidden in a tax haven” but were fully declared and taxed in Iceland, and insisted he and his two-party centre-right coalition government had always put the interest of the public before his own in dealing with the financial claims. However, as many of his political opponents, local media and ordinary citizens are still struggling to recover from the crisis, his future remains uncertain, with many admitting they feel he should have been open about his family’s overseas assets and the existence of Wintris.