Icelandic police raid Baugur Group headquarters

Nordic Business Report, August 30, 2002

NORDIC BUSINESS REPORT-30 August 2002-Icelandic police raid Baugur Group headquarters (C)1994-2002 M2 COMMUNICATIONS LTD http://www.m2.com

The economic crimes department of the Icelandic police force searched the headquarters of Icelandic retailer Baugur Group hf on the evening of 28 August.

The group's chairman and chief executive has been accused of fraud and the investigation centres on Baugur's relationship with US wholesaling company Nordica Inc.

In a statement, Baugur Group said that the charges brought by a representative of Nordica were without foundation and that there were substantial procedural flaws in the ruling by the Reykjavik District Court which authorised the police search.

Baugur Group plans to launch a Supreme Court challenge to the District Court ruling which authorised the search, and has filed a complaint to the District Court of Reykjavik regarding the action of the police.

Baugur owns 20% of the UK fashion retailer Arcadia, which is currently considering a takeover bid from the owner of rival group BHS. The Icelandic group reportedly stands to acquire Arcadia's young fashion chains should the bid be accepted.

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