REYKJAVIK Baugur executive chairman Jon Asgeir Johannesson lost his appeal against a conviction for breaking Iceland's accounting laws, a court document showed on Friday, and could have to quit the board of the investment firm.
A court document posted on the Internet said Johannesson's guilty verdict was upheld on Thursday and he received a three-month suspended prison sentence.
Although Johannesson escaped prison, he is expected to have to resign as chairman of Baugur, which he founded, and Iceland's FL Group as well as the boards of other Icelandic firms.
Icelandic law prohibits people who have been convicted of violating the penal code from serving on company boards for three years.
Baugur's investments also include department store House of Fraser and toy retailer Hamleys in Britain.
The court ruling ends a six-year legal battle that has captivated Iceland's corporate world.
The case began in 2002 when police raided Baugur's headquarters looking for evidence of corporate offences.
Baugur argued the raid broke the law but a court backed police, ruling that prior notification could have resulted in evidence being destroyed or hidden.
At his original trial Johannesson faced a plethora of charges but was convicted on just one.
The court document said Johannesson had participated in "fabricating" business activity and included it in the company's books. Baugur had included in its annual accounts a false credit from another company for $589,890 (299,472 pounds), the document said.
Gestur Jonsson, Johannesson's lawyer, suggested his client was the victim of a witch-hunt.
"I think that the ‘big' result in a case that has taken six years of the Icelandic justice system's time is that Johannesson has been convicted of a minor violation," Jonsson told Reuters on Friday.
(Reporting by Kristin Arna Bragadottir; Editing by Jon Boyle)