First day of Baugur proceedings Skip to content

First day of Baugur proceedings

Jón Ásgeir Jóhannesson at court.

When a country as small as Iceland is able to count among its own the likes of multi-millionaire retail mogul Jón Ásgeir Jóhannesson, an undisputed prince of the British High Street, it is bound to attract attention at home as well as abroad when he runs into trouble.

The 37 year-old tycoon, sporting long wavy hair and his signature black tee-shirt and jacket, showed up yesterday in Reykjavik’s District Court accompanied by his lawyers as the prosecution read a long list of charges.

The defendent, along with two of his top executives as well as his father and sister, is accused of charges ranging from what could be construed as trifle oversights, such as using the company credit card to buy fastfood meals, to serious financial crimes including insider trading, customs fraud and declaring artificial profits in order to boost Baugur’s share prices.

His empire, which has its origins in the hugely successful low-cost grocery retailer, Bónus, founded by his equally enterprising father, Jóhannes Jónsson, today includes such high-end retail names as Hamley’s, Karen Millen, and TopShop and spans from the U.K., to Denmark, the Faroe Islands, and of course Baugur’s headquarters in Iceland.

“How does the defendent, Jón Ásgeir Jóhannesson, plead to the charges?” asked a bearded, bespeckled District Judge with a grandfatherly manner.

“They are completely wrong, and I am innocent,” Jóhannesson replied.

The co-defendents followed suit, a trial date was set, and lawyers exchanged neat binders filled with copies of evidence.

The hearing itself contained few surprises. It would be an exaggeration to say that the proceedings were much more than a formality, but this didn’t stop members of the local press from attending. Six photographers, two television cameramen and at least fifteen microphone-equipped reporters, including Scandinavian and British correspondents, clogged the district court’s antechamber for a full hour before the defendents appeared. A ban on cameras within the courtroom was but a small obstacle to ambitious photographers who literally filled the courtroom’s doorframe, temporarily blocking the defendents exit.

A cry of “Here they come!” roused the mass of media from their revery, followed by sounds of scrambling feet, myriad shutter clicks, and the blinding light of hundreds of camera flashes.

But how did it come to this, and is this level of media attention warranted in light the actual charges that appear?

A local newspaper journalist who attended the hearing pointed out that the real issue is less whether Jóhannesson and his co-defendents are convicted, and more how faith in Baugur has now been shaken. In a post-Enron world, any company which shows signs of weak internal accounting practices could find itself shunned by investors, potential partners, and creditors alike.

A Danish television correspondent reported yesterday evening, “In view of these proceedings, there is little doubt that people will be entering into business with Baugur more carefully than before. What is it that these Icelanders are doing that allows them to achieve higher profitiablity in Denmark than we Danes can do ourselves? This question has yet to be answered in Denmark,” he added ominously.

An independent British law firm, Capcon-Argen Limited, announced at a Baugur-sponsored press conference yesterday morning that, after examining all the prosecution’s evidence, there could be reasonable explanations to all the charges.

Jóhannesson will next be seen in court on 25 October, when the trial is due to begin. As his father pointed out in an impromptu interview immediately following yesterday’s hearing, “We have faith that the District Court will fairly review the evidence and declare us innocent of any wrong doing. Ninety-eight percent of the Icelandic nation stands behind us.”

But in an era where fortunes are built overnight and reputations are destroyed even more rapidly, what the future holds for Jóhannesson and Baugur is anyone’s guess.

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