Byr Savings Bank former Chairman Jon Thorsteinn Jonsson and the lender’s ex-Chief Executive Officer Ragnar Zophonias Gudjonsson were today found guilty of fraud and sentenced to four and half years in prison by Iceland’s Supreme Court.
The court found that the two former executives had used their positions at Byr to grant an 800-million kronur ($6.2 million) loan to Exeter Holdings ehf in 2008 as Iceland’s financial system was on the brink of collapse.
Proceeds of the loan were used by Exeter to buy Jonsson’s and Gudjonsson’s shares in Byr. Exeter guaranteed the loan by putting the Byr shares up as collateral.
“In deciding the punishment” the Supreme Court took account of the fact that the “magnitude of the offences was significant,” according to the ruling posted on the Reykjavik-based court’s website. Jonsson’s action “relieved him from personal guarantees on loans” and Gudjonsson’s “infraction was committed under the auspices of his mandate” as Byr’s chief executive officer, according to the ruling.