February 7, 2013 / 8:26 PM / in 5 years

Former Icelandic retail baron found guilty of tax evasion

REYKJAVIK, Feb 7 (Reuters) - Iceland’s Supreme Court on Thursday found the boss of failed retail group Baugur guilty of tax evasion, handing him a suspended one-year prison sentence and a fine of 62 million Icelandic crowns ($488,959).

Jon Asgeir Johannesson was the head of Baugur, which owned stakes in a string of British high-street retailers but collapsed under the weight of huge debts amid Iceland’s financial meltdown.

The Supreme Court found that 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 the activities of the Baugur investment firm.

Baugur once amassed stakes in retailers such as toy store Hamley’s and frozen foods chain Iceland with Johannesson becoming a key player as Iceland’s financial firms expanded across Europe with debt-fuelled acquisitions.

But as the global financial crisis struck in 2008, the mountain of debt came crashing down and Iceland’s commercial banks collapsed in quick succession, eventually 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).

Iceland has been looking to bring to justice those who were instrumental in the spectacular financial collapse.

In December last year, two former executives of one of the three collapsed banks were sentenced to jail in the first major trial of the Icelandic bankers linked to the crisis.

$1 = 0.6368 British pounds Reporting by Robert Robertsson via Stockholm newsroom; Editing by Robin Pomeroy

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