Iceland’s Prime Minister has resigned after the Panama Papers showed he owned an offshore business that he failed to declare when entering parliament in 2009.
The Panama Papers have revealed how many of the world’s rich and powerful are using offshore accounts to hide wealth and, in some cases, minimise tax liability.
The leaks showed Sigmundur Gunnlaugsson and his wife set up an offshore company called Wintris in the British Virgin Islands with the assistance of Panama-based law firm Mossack Fonseca.
Mr Gunnlaugsson, the first prominent political casualty of the leak, was accused of concealing millions of dollars in family assets and criticised for failing to disclose a conflict of interest. Court records show Mr Gunnlaugsson’s company invested in three Icelandic banks that collapsed during the 2008 global financial crisis. The PM was personally involved in negotiations during the crisis but never advised investigators that he owned Wintris, a creditor of the banks.
Mr Gunnlaugsson denies any wrongdoing, saying he sold his shares in Wintris to his wife, Anna Sigurlaug Pálsdóttir, eight months after entering parliament. He also maintains that his wife did not benefit financially. A document signed by Mrs Pálsdóttir revealed that the company was used to invest millions of inherited money.
Mr Gunnlaugsson’s resignation statement said the holdings of Wintris had been recognised as an asset on Mrs Pálsdóttir’s tax returns since 2008, and that all taxes had been accounted for in Iceland.
The Agriculture Minister, Sigurður Ingi Jóhannsson, will serve as interim Prime Minister. – Ashleigh Cant
Screengrab of protests outside Parliament in Iceland from Al Jazeera news.