Guardian questions investigation of Baugur CEO Skip to content

Guardian questions investigation of Baugur CEO

By Iceland Review

British daily The Guardian reports on the 40 charges brought against Baugur CEO Jón Ásgeir Jóhannesson and several other individuals affiliated with Baugur today. According to the article the paper has seen a copy of the 37 page indictment due to be presented to a Reykjavik court next week.

The article provides the most detailed account of the charges to date. The charges have already been presented to the individuals under indictment but they will not be made public until August 16th.

British Business Journalist of the Year, Ian Griffiths, details his findings in two articles in today’s paper: “High street financier accused of Big Mac fraud” and “Baugur paper trail ends in court“.

The Guardian describes the translated version of the indictment as “couched in strict legalistic terminology, yet the wording of the charges suggests little allowance has been made for the fast-moving nature of an internationally expanding retail business.”

Griffiths notes that Jón Ásgeir has been charged with “embezzling a Big Mac and a hot dog” and goes on to suggest that “the issues underpinning the charges are more complex than the official indictment suggests”.

Griffiths divides the charges into 8 categories:

19 involve transactions between Baugur and parties related to Jón Ásgeir Jóhannesson (notably Gaumur)

6 relate to the presentation of Baugur’s accounts

4 allege custom fraud not related to Baugur

3 relate to luxury yachts in Florida

3 relate to the acquisition of the 10/11 convenience store chain

2 relate to dealings in Arcadia shares

2 charges target the personal spending of Tryggvi Jónsson, Baugur’s former CFO

1 alleges that credit notes were used to inflate profits.

Griffiths writes that the indictment lists almost 200 items Jón Ásgeir bought on the company credit card but were later repaid, “the transactions show him shopping at Gucci, Armani Exchange, Dolce Gabbana, Prada and Nike, as well as tracking his apparent visits to a sleazy bar in Florida. He is further accused of using company money to buy pizzas and fried chicken. In addition, a former colleague of Mr Johannesson’s is charged with embezzling the customs duties on a lawn mower.”

Griffiths observes that “A superficial reading of the indictment paints the defendants, particularly Mr Johannesson, in a poor light. The document is littered with allegations of embezzlement, fraud, breach of trust, crimes and violations… yet each charge seems to ignore economic reality and can be given an innocent explanation”.

This is Ian Griffiths second in-depth feature on the business life in Iceland. His June 16 article, “Next-generation Viking invasion”, raised questions how Icelandic raiders were funding their acquisitions.

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