Mixed reaction in Iceland to Baugur verdict Skip to content

Mixed reaction in Iceland to Baugur verdict

Jóhannes Jónsson said he was “enormously relieved” after hearing the verdict, reported Icelandic National Broadcasting Service, RÚV, on Wednesday.

Jóhannes is the father of Baugur CEO Jón Ásgeir Jóhannesson; he was also one of the defendants in the case filed by state prosecutors against several Baugur managers, auditors and directors.

According to RÚV, Jóhannes reiterated previous claims that “higher ups” had “issued a hunting license” for the “Baugur-people”. He said that if the prosecution continued to pursue the case, the defendants would appeal to the [European] Court of Human Rights. The defendants were not happy with how the case was handled and how long the investigation took. Jóhannes declined to discuss the part played by the police.

According to RÚV, Jóhannes also said he was “happy and glad” about the verdict. He hoped that the matter would now come to an end. He said it was now four years since the “ordeal” started, and he was fed up with it, and many others were probably, too. Jóhannes said he “had a clue” about how much the case had cost Baugur but refused to disclose any specific amounts.

According to RÚV, Gestur Jónsson, who defended Jón Ásgeir, “welcomed” the verdict. Gestur “was not perplexed” by the court’s apparent lack of credibility in the testimony of Jón Gerald Sullenberger. Gestur also said he thought the verdict was “very clear” about the charges that related to the alleged violations of the commercial code and accounting practices.

Gestur said he could “could not imagine anything else but that the prosecution would hesitate to base further charges on the testimony of Jón Gerald.”

Baugur CEO Jón Ásgeir Jóhannesson appeared on news program “Fréttavaktin” on TV-Station NFS. NFS is operated by 365 Media which is owned by the holding company Dagsbrún of which Baugur is the largest shareholder. Jón Ásgeir said it was “tragic” that the Icelandic government had to bear the great expense of prosecuting this case at the same time the Icelandic Coast Guard did not have adequate funds to operate its rescue helicopters. Jón Ásgeir added that it was “possible” that the Icelandic state would be sued for damages in connection with the case.

As part of the verdict, the state was found liable for the costs of the defendant’s attorneys to the amount of ISK 57 million.

According to RÚV, special prosecutor Sigurdur Tómas Magnússon refused to comment on the verdict.

According to RÚV, Jón H. Snorrason, head of the Economic Crimes division of the National Police, also refused to comment on the verdict.

Morgunbladid covered the verdict in considerable detail on its website. Concerning the charges relating to the alleged evasion of import duties and preparation of false documents in connection with automobiles the defendants imported from the US, the verdict says that it “was not proved” that the purchase price of the automobiles had been greater than the price declared to customs. Morgunbladid cited the verdict saying that the weight of the testimony of Jón Gerald Sullenberger was reduced because of Jón Gerald’s feelings towards Jón Ásgeir and his family. The testimony of Ivan Gabriel Motta, a US car salesman, was “confusing” in some respects, and Motta and Jón Gerald had had considerable contact prior to testifying.

Concerning the charges that related to alleged violations of the criminal and commercial code, Morgunbladid again cited the verdict. According to the verdict, during the relevant period, 1998-2002, the commercial code did not require the disclosure of loans to shareholders or managers in the annual statements. It would have been sufficient to mention such loans in the notes to the annual statements.

According to Morgunbladid, the verdict further claimed that none of the transactions referred to in the charges could be considered loans under the code governing annual statements. “It follows that the annual statements can not be considered having been prepared with false or misleading itemizations,” wrote Morgunbladid, referring to the verdict.

The minister of justice, Björn Bjarnason, said on his website, “I will not discuss the verdict of the District Court in the Baugur case – even my description of the facts could provoke hysteria.”

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