Iceland’s Robin Hood

The "small but hugely ambitious world" of Icelandic business has been rocked by a slew of fraud and corruption charges against Jon Asgeir Johannesson, says The Economist. With his rock-star good looks and seemingly unbounded self-confidence, Johannesson, 37, whose audacious deal-making skills have made him one of the most influential players in British retail, had come to epitomise the wave of youthful Icelandic entrepreneurs who have recently catapulted their way into the bigger leagues of international capitalism. Inevitably, their newfound dominance has stirred up a good deal of "envy and resentment" in the tiny island state, says the FT.

Johannesson enjoys heroic Robin Hood status among many of the island's 300,000-strong population, says The Guardian. They credit Jon Asgeir and his father, who founded their first Bonus cut-price food store outside Reykjavik in 1989, with revolutionising Iceland's stagnant retail market. Johannesson was not "one of the elite who travelled abroad to study in prestigious universities", says the FT and his English remains hesitant. "But he rarely hesitates when it comes to discussing numbers." Within a few years, his grip of supply chain logistics saw Bonus become a chain. By 1999, when it acquired Iceland's 10-11 convenience store chain, the renamed Baugur was Iceland's dominant retail conglomerate.

Next, Johannesson's retail conquest of the Faroe Islands was followed by a swift assault on Scandinavia, but it was his association with retail tycoon Philip Green that paved the way for his greatest coups. First, Johannesson gained control of Arcadia's Top Shop subsidiary's Icelandic franchise. But when Green proffered a partnership deal as part of his own bid to take over the entire Arcadia group, Johannesson leapt at the chance. However, trouble was already brewing.

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In 2002, Miami-based Jon Gerald Sullenberger claimed Johannesson had used Baugur funds to buy a 60ft yacht and attempted to pay for call girls using a company credit card. That case was eventually settled out of court, but it provoked a raid by the Icelandic tax authorities, forcing Baugur to pull out of the Arcadia deal.

Still, Johannesson didn't do too badly out of the scandal, says the Investors Chronicle: Baugur bought its Arcadia shares at 40p each and sold to Green at 418p. On the back of the profits, Johannesson went on a UK shopping spree, buying the Big Food Group, the Whistles and Oasis fashion chains, and iconic toy store Hamleys. Back in Iceland, meanwhile, his interests now extended into media, communications and banking. Matters came to a head last year when Iceland's former prime minister, David Oddsson, who claims Baugur tried to bribe him, tried to push through a media law aimed at limiting Baugur's interests, says The Economist.

It was blocked with a veto from the President, whose daughter works for Baugur. Johannesson maintains the latest tranche of some 40 charges bear the clear marks of vendetta: one of the prosecution witnesses is his father's jilted girlfriend. Moreover, his supporters say that each new investigation appears to coincide with the closing of a major deal in this instance, Baugur's £1.1bn tilt at Somerfield, from which it has now been forced to withdraw. With two of the country's three largest banks now heavily implicated in the imbroglio, it's safe to say that things in Iceland look set to become very hot indeed