(Johannesson comment, background)
REYKJAVIK Feb 7 The boss of failed retail group
Baugur was found guilty of tax evasion on Thursday and handed a
suspended one-year prison sentence and a fine of 62 million
Icelandic crowns ($500,000) by Iceland's Supreme Court.
Jon Asgeir Johannesson's investment company owned stakes in
a string of British high-street retailers including Hamley's,
Iceland and House of Fraser. It collapsed under huge debts
during Iceland's financial meltdown.
The court found Johannesson had deliberately filed erroneous
tax returns on earnings of 172 million crowns. He was also
convicted on several counts of tax irregularities related to
Johannesson was a key player as Iceland's financial firms
expanded across Europe with debt-fuelled acquisitions.
But when the global financial crisis struck in 2008,
Iceland's commercial banks collapsed in quick succession,
forcing the country to seek aid from the International Monetary
Baugur filed for bankruptcy in March 2009 with debts of more
than 1 billion pounds ($1.57 billion).
After the verdict, Johannesson labelled the long-running
case against him a fiasco and said that the size of the fine was
"peanuts" compared to the costs of pursuing the case.
"They didn't find the big crime they wanted and nobody goes
to jail," he said in a statement. Johannesson's sister and a
former associate also received suspended prison sentences.
Iceland has been looking to bring to justice those linked to
the spectacular financial collapse.
In December, two former executives of one of the three
collapsed banks, Glitnir, were jailed in the first major trial
of Icelandic bankers linked to the crisis.
Johannesson faces further legal action. In the opaque web
that was Iceland's financial sector, he was also the biggest
shareholder in Glitnir through an investment company.
Baugur and other related businesses borrowed more than 1.2
billion pounds from Glitnir before the financial meltdown, by
far the bank's biggest exposure.
In December, charges were brought by Iceland's special
prosecutor investigating the crash alleging Johannesson exerted
improper influence on Glitnir in connection with some of these
Prosecutors are seeking the maximum sentence of six years in
($1 = 0.6368 British pounds)
(Reporting by Robert Robertsson via Stockholm newsroom; Editing
by Robin Pomeroy)