Iceland's president faces potential questions in his re-election campaign over reports Tuesday that his parents-in-law had a company in a Caribbean tax haven.
The so-called Panama Papers leak suggested that the parents of Olafur Ragnar Grimsson's wife Dorrit Moussaief had an offshore company in the British Virgin Islands from 1999 to 2005, channelling funds from a jewellery firm, according to German newspaper Sueddeutsche Zeitung and Icelandic news site Kjarnin.
The offshore company, Lasca Finance Limited, paid several million pounds (dollars) in interest. It was set up by Panama-based law firm Mossack Fonseca, the reports said.
The president's office said "neither the president nor Dorrit (Moussaief) know anything about this company or have heard of it before. Dorrit's father is deceased and her mother, who is 86 years old, doesn't remember such a company," the statement to Kjarnin said.
Earlier this month, Iceland's premier Sigmundur David Gunnlaugsson resigned after leaked data suggested he and his wife had a company in the British Virgin Islands.
Gunnlaugsson denied any wrongdoing, but the revelations triggered public protests and calls for early parliamentary elections. After Gunnlagusson resigned, the centre-right government said it would move the polls forward instead of holding them in April 2017 as scheduled.
The protests and political uncertainty were cited by Grimsson a week ago when he announced he would run for a sixth term in June. In his New Year's speech, the 72-year-old said he would not seek a new term.