Fraud squad raid top Tory donor’s bank

The Serious Fraud Office has raided a Luxembourg bank owned by the Tory party’s top donor David Rowland. More than 70 investigators searched three business premises and two homes in Luxembourg yesterday as part of an investigation into failed Icelandic bank, Kaupthing.

In February, the Bureau of Investigative Journalism revealed that David Rowland was the Tory party’s top donor having given more than £4million to the party. David Rowland was due to take over as Tory Party treasurer last year but declined to take up the position after allegations surfaced about his business dealings and private life.

The inquiry into the Icelandic bank collapse is one of the largest ever cross-border fraud investigations in Europe. The Serious Fraud Office said 70 of its investigators, the Icelandic Special Prosecutor and Luxembourg Police executed search warrants on three business premises and two residential premises in Luxembourg.

Kaupthing collapsed in October 2008, leaving the UK Treasury with a £2billion compensation bill for UK savers. The Rowland family bought the defunct Luxembourg branch of Kaupthing in July 2009 and re-named it Banque Havilland in a high-profile ceremony attended by the Duke of York.

The SFO said: ‘The operation relates to the SFO’s ongoing investigation into the circumstances surrounding the collapse of the Kaupthing Banking Group and related investigations by the Icelandic Special Prosecutor. Investigators want to gather more information to see whether there was any foul play behind Kaupthing’s collapse.

David Rowland’s son Jonathan, who is chief executive of Havilland, issued a statement: “The reason for the visit is not related to the activity of Banque Havilland S.A. and concerns the former Kaupthing Bank and the ongoing investigations. We cannot provide further details other than to state that we are fully co-operating with the authorities.”

David Rowland and Banque Havilland are not under investigation and the authorities are not accusing either of wrongdoing.

The SFO inquiry, which saw the arrest of the billionaire Tchenguiz brothers earlier this month, is looking at how some major depositors in Kaupthing were able to withdraw their money just before the bank went under. Investigators are trying to track down confidential files, emails and data that the bank may hold.

Luxembourg police acting on behalf of investigators from Iceland seized documents and files relating to Kaupthing’s clients last year.

In January, Mr Rowland lost an appeal to keep papers relating to Kaupthing private at Luxembourg’s Supreme Court.

In February, the Bureau of Investigative journalism revealed that David Rowland was the biggest individual City backer of the Tories contributing £4.013 million. Rowland made his fortune from property investment, but he has moved into more general investment and City activity.

The Bureau’s research also revealed how bankers and financiers who were deeply linked to the global financial crisis have also been bank-rolling the Conservative Party:  donations from companies and individuals connected to the financial services industry has now reached more than half of Tory party funding.