Icelandic District Court Acquits Ex-Baugur, Glitnir Bosses

The District Court of Reykjavik acquitted the former chief executive officers of Baugur Group hf and Glitnir Bank hf for their roles in approving a 6 billion kronur ($53 million) loan in 2008.

Baugur’s ex-CEO, Jon Asgeir Johannesson, Glitnir’s former chief Larus Welding as well as the two former directors were charged with overstepping their legal mandate when they approved a loan to holding company FS38 ehf., three months prior to Glitnir’s failure in October 2008.

According to the ruling by the court today, the loan didn’t violate the bank’s rules as was charged in the indictment. The two former directors were also acquitted. Johannesson was accused of exerting pressure as one of the largest shareholders in Glitnir to get the loan approved.

None of the witnesses brought before the court “supported that claim in the indictment,” the court said.

“After years of relentless investigations by the Icelandic authorities I’m delighted that a court has finally found me innocent of all the charges brought against me,” Johannesson said in an e-mailed statement provided by FTI Consulting. “I have always maintained my innocence and I now feel completely vindicated. With the case behind me, I now look forward to re-building my career as an investor in great retail businesses.”

A year before Iceland’s economic meltdown in 2008, Johannesson was the country’s third richest man with a fortune amounting to $1.6 billion. He expanded a retail business into the U.K., an expansion that included the acquisition of toy store Hamleys Plc and department store House of Fraser Ltd. Both have since been sold.

The conclusion of the court is “correct,” Ottar Palsson, Welding’s lawyer, said in an interview. He declined to comment further.

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