arrests have been made in dawn raids by the Serious Fraud Office as part of its investigation into the collapse of the Icelandic bank Kaupthing.

Seven men aged between 42 and 54 were arrested in central London. Two further arrests were made in Reykjavik.

Mayfair investment tycoons Robert and Vincent Tchenguiz, who were among Kaupthing’s largest clients, were among those detained.

It is understood that Armann Thorvaldsson, who was head of Kaupthing Singer and Friedlander (KSF) in the UK, and Sigurdur Einarsson, Kaupthing’s London-based former executive chairman and chief executive, have also been arrested.

All deny any wrong-doing.

KSF (Isle of Man) collapsed in October 2008 when the UK authorities placed its sister operation in London into administration. Some 11,000 creditors were faced with losing deposits totalling more than £840 million.

Two years ago, Armann Thorvaldsson published a book, Frozen Assets, giving his account of Iceland’s boom and bust which chronicled KSF’s final hours.

Investigators at the SFO want to know how some clients were able to withdraw funds in the days before the bank’s collapse and why some were able to take large loans backed with minimal collatera