Icelandic tycoon, bank exec indicted

Dec. 18, 2012 at 1:01 AM   |   Comments

REYKJAVIK, Iceland, Dec. 18 (UPI) -- The heads of a company that scooped up British retailers during the boom and a major bank face criminal charges, Icelandic prosecutors say.

Jon Asgeir Johannesson, who operated Baugur, an Icelandic investment company, Larus Welding, who served as chief executive officer of the now-bankrupt bank Glitnir, and two of the bank's directors were indicted last week, British newspaper Financial Times reported. Johannesson, who had large holdings in Glitnir, allegedly pressured the bank to make a loan of almost $50 million to buy a company that owned two British jewelry retailers, Olafur Hauksson, a special prosecutor, said.

The defendants are scheduled to appear in court Jan. 7.

Before Iceland's banking system collapsed in 2008, a number of Icelandic raiders used cheap credit to buy British retail chains.

"It is part of a bigger tale. It is important to how this was actually, how our financial institutions were operating before the crisis," Hauksson told the Times.

Thousands of European depositors lured by high interest rates lost their money when the Icelandic banks collapsed.

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