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Former FL Group CEO Acquitted in District Court

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Former FL Group CEO Acquitted in District Court

Money - Icelandic Króna

Photo: Páll Kjartansson

Former CEO and of investment company FL Group Hannes Smárason was this morning acquitted of charges of embezzlement from the company’s funds in Reykjavík District Court. The prosecution is to cover all costs, including ISK 10 million (USD 76,000, EUR 66,000) in defensive fees.

The Office of the Special Prosecutor in Iceland, responsible for investigating the banking collapse in 2008, had charged Hannes for embezzlement for an ISK 2.9 billion (USD 22.0 million, EUR 19.3 million at today’s exchange rate) transaction from FL Group’s bank account at Kaupþing in Luxembourg to the account of holding company Fons in April 2005.

The transaction occurred five days after the account was established without the company’s executives or board members having been informed of it or approved it, ruv.is reports.

Hannes maintained his innocence during the trial and stated that he didn’t understand why he was being taken to court. Hannes reasoned that the transaction hadn’t caused the company any financial damage and that he, as the largest shareholder in FL Group, had had his own interests to protect as well and would therefore not make pointless transactions.

Hannes did not attend the verdict’s announcement this morning.

Finnur Þór Vilhjálmsson, the prosecutor’s representative at the Special Prosecutor’s Office, had requested a two to three-year prison sentence over Hannes for embezzlement.

Finnur stated that Hannes no doubt had violated the law in making the transaction without the knowledge or approval of the board and in keeping the balance of the account in Luxembourg secret from them. Among evidence were emails, bank statements and other documents.

The verdict will likely be appealed to the Supreme Court.

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