Baugur boss charged with fraud

THE £1.1bn bid for supermarket group Somerfield was thrown into chaos this weekend after the chief executive of one of its suitors was charged with fraud.

The probe into the millionaire boss of Baugur, Jon Asgeir Johannesson, began in 2002 as he was planning to join billionaire retailer Philip Green in his planned takeover of fashion retail group Arcadia.

He was charged with fraud after a three-year investigation, according to reports this weekend.

Raids on Baugur's offices in Iceland forced him to drop out of the running, though he made £55m from selling his stake in Arcadia.

Since then, Baugur has amassed a portfolio of UK retail businesses, including Iceland, Hamleys, Oasis and Mark One. Johannesson is currently linked to a potential £1bn bid for the Somerfield supermarket chain as well as linked with building a stake in M&S.

Baugur retains a franchise for Top Shop - part of Philip Green's empire - in Iceland. It has also been closely linked with Kevin Stanford, the co-founder of the Karen Millen fashion business. Stanford has an 8% stake in Baugur and last week emerged as the holder of a £29m holding in M&S.

The precise charges against 37-year-old Johannesson have not been revealed. Others charged by Icelandic police are understood to include his father and sister as well as Kristin Johannessdottir and Tryggvi Jonsson, a former chief executive of Baugur but not a family member.

Two other individuals are believed to be involved. Everyone involved denies the charges. Baugur, in which Johannesson's family has a 70% stake, is Iceland's biggest retail group, owning supermarkets and media companies. It gained this position in only 16 years after the family opened a grocery store with a bank loan of £5,000.