Baugur CEO settled credit card bills only after internal audit Skip to content

Baugur CEO settled credit card bills only after internal audit

Jón Ásgeir Jóhannesson’s credit card debts cited in the charges against him were paid with a promissory note in May 2002 shortly after an abrupt internal audit of Baugur’s books took place, reports Icelandic Broadcasting Service, RÚV. The internal audit was prompted after former prime minister David Oddsson met with Baugur chairman Hreinn Loftsson in January 2002.

Among other charges, Jón Ásgeir is charged with embezzling funds by having Baugur pay his credit card bills from 1998 – 2002. The yearly sums varied, ISK 60,000 for 1998 and ISK 10 million for the year 2001. The total charges amounted to ISK12.5 million. According to RÚV, the transactions are numerous, from a ISK 390 charge at drive through convenience store Aktu Taktu to a ISK 650,000 purchase at Gucci.

RÚV reports that transactions on Jón Ásgeir’s credit card were accounted for as claims against Jón Ásgeir in the books of Baugur. A one time payment was made with a promissory note in May 2002. Gestur Jónsson, Jón Ásgeir’s lawyer, emphasizes that Jón Ásgeir’s debts to Baugur arising from his personal expenditures were never accounted for as a company expense, and that Jón Ásgeir paid all his personal expenses.

It was the practise of Baugur to file Jón Ásgeir’s credit card transactions as claims, and unless he brought an invoice for the expenditure the transaction remained a claim on the books of Baugur. RÚV reports that because of this practise, Jón Ásgeir owed Baugur ISK 12.5 million until the claims were paid by a promissory note in May 2002. RÚV points out that at the time the oldest claim was then three and a half years old.

In a separate news item from yesterday, RÚV recounts the history of Baugur and reports that in January 2002 Baugur chairman, Hreinn Loftsson, met with the then prime minister, and Hreinn’s former close friend and colleague, David Oddsson, in London. After the meeting Hreinn expressed serious concerns and demanded that Baugur’s accounts be examined thoroughly. In an interview with Spotlight on Tuesday, Jón Ásgeir says, “Hreinn [chairman] told me he [Davíd Oddsson] directly threatened actions by the authorities against the company. Hreinn was so startled, that he said, ‘I want to know everything that is going on here at the company these accusations are so serious and I know that these people will follow through.'”

RÚV reports that accounting firm KPMG was then commissioned to do an internal audit at Baugur. The credit card claims were not paid until after this internal audit took place, five months after former prime minister David Oddsson and Baugur chairman Hreinn Loftsson met in London.

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