REYKJAVIK 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 Baugur's activities.
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 Fund.
Baugur filed for bankruptcy in March 2009 with debts of more than 1 billion pounds ($1.57 billion).
After the verdict, Johannesson labeled 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 loans.
Prosecutors are seeking the maximum sentence of six years in jail.
(Reporting by Robert Robertsson via Stockholm newsroom; Editing by Robin Pomeroy)