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Baugur boss guilty of tax evasion Baugur boss guilty of tax evasion
(35 minutes later)
The boss of failed retail group Baugur was found guilty of tax evasion on Thursday and handed a suspended one-year prison sentence and fine of 62m Icelandic crowns (£310,000) by Iceland's supreme court.The boss of failed retail group Baugur was found guilty of tax evasion on Thursday and handed a suspended one-year prison sentence and fine of 62m Icelandic crowns (£310,000) by Iceland's supreme court.
The investment company run by Jon Asgeir Johannesson, above, owned stakes in a string of British retailers including Hamley's, Iceland and House of Fraser. It collapsed under huge debts during Iceland's financial meltdown.The investment company run by Jon Asgeir Johannesson, above, owned stakes in a string of British 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 172m crowns. He was also convicted on several counts of tax irregularities related to Baugur's activities.The court found Johannesson had deliberately filed erroneous tax returns on earnings of 172m 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, forcing the country to seek aid from the International Monetary Fund. Baugur filed for bankruptcy in March 2009 with debts of over £1bn.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, forcing the country to seek aid from the International Monetary Fund. Baugur filed for bankruptcy in March 2009 with debts of over £1bn.
After the verdict, Johannesson labelled the long-running case against him a fiasco and said the size of the fine was "peanuts" compared withthe 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. After the verdict, Johannesson labelled the long-running case against him a fiasco and said the size of the fine was "peanuts" compared with 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.
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.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.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 £1.2bn pounds from Glitnir before the financial meltdown, by far the bank's biggest exposure.Baugur and other related businesses borrowed more than £1.2bn 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.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.Prosecutors are seeking the maximum sentence of six years in jail.