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Baugur 'knew of trouble year before its collapse'
19.06.09
A NEW book into the failure of the Icelandic economy claims that directors of retail investment house Baugur knew of its financial troubles almost a year before it collapsed.
The Icelandic Miracle, by former stockbroker Jon Fjornir Thoroddsen, writes that Baugur was struggling to meet bond obligations as early as March last year. It fell into administration this February.
According to Retail Week, Baugur - which held stakes in many of Britain's High-Street businesses such as House of Fraser- strongly denies the allegations.
The author says management at Kaupthing, the bank which backed Baugur, became concerned about its finances and met to discuss the problem.
"So it was in March 2008 that 30 to 40 people in Iceland learned that Baugur, the biggest debtor of all the Icelandic banks, was having financial problems," says Fjornir Thoroddsen.
The Baugur Group was started by the opening of a single Bónus supermarket in Reykjavik in 1989.
