Panama Papers: Iceland Prime Minister Gunnlaugsson resigns over offshore holdings

Iceland Prime Minister Sigmundur David Gunnlaugsson leaves President Grimsson's residence after a meeting between them on April 5, 2016, in Reykjavik.
Iceland Prime Minister Sigmundur David Gunnlaugsson leaves President Grimsson's residence after a meeting between them on April 5, 2016, in Reykjavik.PHOTO: EPA
 People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik on April 5, 2016.
People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik on April 5, 2016. PHOTO: REUTERS
People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik on April 5, 2016.
People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik on April 5, 2016.PHOTO: REUTERS
People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik, Iceland, April 5, 2016.
People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik, Iceland, April 5, 2016. PHOTO: REUTERS
People protest against Iceland’s Prime Minister Sigmundur David Gunnlaugsson outside Parliament in Reykjavik on April 4, 2016.
People protest against Iceland’s Prime Minister Sigmundur David Gunnlaugsson outside Parliament in Reykjavik on April 4, 2016.PHOTO: AFP

REYKJAVIK (AFP) - Iceland’s Prime Minister Sigmundur David Gunnlaugsson has resigned, his party said on Tuesday (April 5), the first major political casualty after the leak of the so-called Panama Papers financial documents.

“The Prime Minister told (his party’s) parliamentary group meeting that he would step down as prime minister and I will take over,” the Progressive party’s deputy leader and agriculture minister, Mr Sigurdur Ingi Johannsson, said in a live broadcast.

The junior member of the centre-right government coalition, the Independence Party, still has to approve the switch.

Mr Gunnlaugsson, 41, had been under pressure to resign after the leaked documents revealed that he and his wife Anna Sigurlaug Palsdottir owned an offshore company in the British Virgin Islands and had placed millions of dollars there.

Thousands of demonstrators had protested outside Parliament in Reykjavik on Monday, throwing eggs and yoghurt at the building and calling on the centre-right leader to step down.

The left-wing opposition had also presented a motion of no-confidence against Mr Gunnlaugsson.

 
 
 
 

Earlier on Tuesday, President Olafur Ragnar Grimsson, who cut short a US visit to return to Reykjavik to deal with the crisis, had refused to grant Mr Gunnlaugsson’s request to dissolve Parliament and call new elections.

Mr Gunnlaugsson’s offshore company, named Wintris and acquired in 2007, was intended to manage his wife’s inheritance from her wealthy businessman father, according to the Panama Papers.

The Prime Minister sold his 50 per cent share to his wife for a symbolic sum of  US$1 at the end of 2009.

But when he was elected to Parliament for the first time in April 2009, he neglected to mention his stake in his declaration of shareholdings.

He said on Monday he regretted not having done so, but insisted he and his wife had followed Icelandic law and paid all their taxes in Iceland.

Several countries, including Singapore, have launched probes into the leaked documents to uncover any wrongdoing using offshore company structures.

The relevant agencies are reviewing the leaked information and conducting checks. "If there is evidence of wrongdoing by any individual or entity in Singapore, we will not hesitate to take firm action," the Ministry of Finance and the Monetary Authority of Singapore said in a joint statement on Tuesday (April 5).

The "Panama Papers" have cast light on the financial arrangements of high-profile politicians and public figures and the companies and financial institutions they use for such activities.

Among those named in the documents are friends of Russian President Vladimir Putin and relatives of the leaders of China, Britain and Pakistan, and the President of Ukraine.

Leading figures and financial institutions responded to the massive leak of more than 11.5 million documents with denials of any wrongdoing as prosecutors and regulators began a review of the reports from the investigation by the US-based International Consortium of Investigative Journalists (ICIJ) and other media organisations.

China has moved to limit local access to coverage of the matter, with state media denouncing Western reporting on the leak as biased against non-Western leaders.

France, Australia, New Zealand, Austria, Sweden and the Netherlands are among the nations that have started probes, and some countries, including the United States, said they are looking into the matter.

While the Panama Papers detail complex financial arrangements benefiting the world's elite, they do not necessarily mean that the schemes were all illegal.

Mossack Fonseca, the Panamanian law firm at the centre of the leaks, has set up more than 240,000 offshore companies for clients around the globe and denies any wrongdoing. It calls itself the victim of a campaign against privacy and claims media reports misrepresent the nature of its business.