Colonel Gaddafi’s state investment fund came within a whisker of buying Kaupthing Bank Luxembourg in 2009

Colonel Gaddafi’s state investment fund came within a whisker of buying Kaupthing Bank Luxembourg in 2009 in a move that would have made the Libyan dictator banker to some of Europe’s wealthiest individuals.

Kaupthing Luxembourg, which specialised in banking services to the super-rich, collapsed along with its Icelandic parent company in late 2008. Pricewaterhouse-Coopers were appointed as administrators to the bank and the Luxembourg government began talks with potential buyers.

A report to creditors of the parent Kaupthing Bank in Iceland reported that a provisional agreement to sell the bank to the Libyan Investment Authority had been signed. But the talks failed and Kaupthing Luxembourg was bought by financier David Rowland in July 2009.

Mr Rowland reopened the Luxembourg bank as Banque Havilland, inviting Prince Andrew as guest of honour at the relaunch.

Kaupthing Luxembourg was the conduit for many of the controversial loans to British entrepreneurs, including Robert Tchenguiz and his brother Vincent, who were recently arrested and questioned, though released without charge, by the Serious Fraud Office as part of their investigation into the collapse of the bank.