Billionaire investor chased for £1.4bn fraud of Icelandic banks

Thursday 13th May 2010

The former CEO of UK retail giant, Baugur, is being chased for his alleged role in siphoning over one billion pounds out of a collapsed Icelandic bank.

A lawsuit filed by the winding-up committee of Glitnir, one of the banks to fall in the Icelandic banking crisis, names billionaire investor Jon Asgeir Johannesson as the leader of a “cabal of businessmen” who “engaged in a sweeping conspiracy to wrest control of Iceland’s Glitnir Bank to fill their pockets and prop up their own failing companies.”

Jon Asgeir Johannesson remains director of the House of Fraser, and chairman of Iceland frozen food chain.

The “white-collar criminal” – as he has been branded in the lawsuit – lives at an unknown address in London and has now been hit with a global asset freeze, meaning he has 48 hours to give up a list of everything he owns.

The lawsuit has placed Glitnir’s collapse squarely on the shoulders of the businessmen, stating: “The individuals siphoned money out of Glitnir at the worst possible time for the bank. Having depleted Glitnir's cash reserves after April 2007 by engaging in heavy and improper lending to entities that they controlled, the individual defendants left Glitnir heavily exposed to the global credit crunch.”

Accountancy firm PricewaterhouseCoopers has also come under fire in the lawsuit, accusing the Icelandic branch of the administrators for “facilitating” the alleged fraud.

Johannesson has denied any wrongdoing in connection with the bank’s collapse, telling Icelandic media that “the distortions and the nonsense in the lawsuit are incredible”.

Glitnir folded in October 2008 at the height of the global banking crisis. It still owes British local councils £200 million.