Iceland PM resigns over the Panama Papers scandal

Protests were held over Sigmundur Gunnlaugsson's offshore holdings

Iceland, parliament, protests, Sigmundur Gunnlaugsson, Panama Papers, Ireland, offshore,

Sigmundur Davio Gunnlaugsson is seen at an EU summit on migration in Malta in 2015 | Image: © European Union

Iceland's Prime Minister has stepped down after the Panama Papers reportedly linked him to an offshore company.

The leaked documents are said to show Sigmundur David Gunnlaugsson and his wife owned a firm in the British Virgin Islands which held €3.4m of investments in Iceland's collapsed banks.

Thousands of demonstrators protested outside parliament in Reykjavik on Monday, throwing eggs, bananas and yoghurt and calling for him to stand down.

Mr Gunnlaugsson earlier requested the President dissolve parliament and call new elections after the left-wing opposition called a vote of no confidence in the government.

But President Olafur Ragnar Grimsson refused, saying he wanted to consult the main parties before making his decision.

Mr Gunnlaugsson is the first casualty of the millions of papers which apparently show the ways the rich and famous can exploit offshore tax regimes.

They were leaked to various media organisations from Panama-based law firm Mossack Fonseca.

What you need to know about the Panama Papers

The leaked documents concern Wintris Inc, a company Mr Gunnlaugsson allegedly created in 2007 with his partner at the time, Anna Sigurlaug Palsdottir, now his wife.

He is reported to have sold his half of the company to Ms Palsdottir for US$1 on December 31st 2009 - the day before a new law came in that would have required him to declare the ownership of Wintris as a conflict of interest.

On Monday, Mr Gunnlaugsson stormed out of a media interview about the papers. He later apologised.

Meanwhile, Transparency International says the State lacks the resources and even the will to investigate tax evasion.

Some 300 Irish companies are named in the Panama Papers, which have exposed the widespread concealment of assets in offshore accounts and shell companies.

The Revenue Commissioners says it is always looking at offshore assets of Irish individuals and companies - and that the number of companies named in the Panama Papers is small enough to investigate.

However, more than 10 years ago the New York Times called Ireland the 'Wild West of European Finance' for its soft-touch on regulation.

CEO of Transparency International John Devitt says that made Ireland attractive for the wrong reasons.

And Irish MEP Brian Hayes says the law firm involved should testify before the European Parliament.