The Icelandic Supreme Court has sentenced Jon Asgeir Johannesson to one year prison, suspending the sentence for two years for tax evasion. In addition, Johannesson is ordered to pay ISK62m, €371.445. The case is a part of a case that has been running since Baugur’s offices were raided in 2002. In the summer of 2008 he was sentenced to 3 month prison, also suspended, for fraud, in a case that also sprung from the raids in 2002. In its sentencing the Supreme Court reprimanded the Reykjavik County Court for giving Johannesson too much scope to delay the case. The sentence was more lenient, according to the judgement, because the criminal behaviour stems from tax returns in the years 1999-2003. The charges were not brought until 2008.
But this is not the only case that brings Johannesson to court these days. The Office of the Special Prosecutor has charged Johannesson and Glitnir managers for causing Glitnir fraudulent losses, as recounted earlier on Icelog. In another case the Glitnir Winding-up Board is suing Johannesson and eight others – Glitnir managers and board members – for a fraudulent lending of ISK15bn to companies related to Johannesson. In both these cases Johannesson is effectively being charged and sued as a shadow director – as someone who was not legally a director but who acted like one who by putting pressure on managers and board caused these huge losses, stemming from loans issued to companies related to Johannesson and his close business partners.
The Glitnir case is related to a case the WuB tried to bring to a New York court but failed. This case is now being fought in Iceland but the New York exercise did probably help the WuB gather valuable information, which will benefits its case in Reykjavik. Johannesson’s defender claimed in court today that his client had no powers to manipulate the Glitnir management. Johannesson emphasises his innocence in both cases.
Johannesson has lately made some investments in the UK, on behalf of his independently wealthy wife. His investment in Muddy Boots, a very successful fine food start-up, made headlines recently. News of his investment indicated he would be on the board of Muddy Boots. It is unclear if this sentencing will affect these plans but with this sentencing he can’t sit on boards of Icelandic companies in the near future. After the sentencing in 2008 he was forced to step down from the board of some UK companies where he had been a board member.
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