Forced police searches took place at ten locations yesterday and last Tuesday in relation to the special prosecutor’s investigation into the Icelandic banking collapse last year.

The raids were directly linked to investigations into the purchase of a 5.01 percent share in Kaupthing Bank by Q Iceland Finance ehf.

Q Iceland Finance is owned by Olafur Olafsson and Sheik Mohamed Bin Khalifa Al-Thani. Kaupthing granted Olafsson, who at the time was the second biggest shareholder in the Bank, a loan for half the cost of the purchase of Q’s 5.01 percent share. The loan was written against his company which is registered in the British Virgin Islands. The loan was secured by the shares themselves and involved no personal risk to Olafsson.

Sigurdur Einarsson, the former Head of the Board at Kaupthing, has said that no money was taken out of the Bank to finance the Sheik’s purchase; but Morgunbladid did report in January that the Bank had been buying up its own shares in order to sell them to the Sheik.

The investigators are looking into alleged market manipulation and punishable embezzlement in relation to the share purchase at the end of September 2008.

The raids yesterday were synchronised and began with simultaneous searches of three premises at 10.00. In all, 20 people took part in the raids, mbl.is reports.