As for the former billionaires, their pre-crisis rise and post-crisis fall is an apt analogy for Iceland’s coming of age, according to Stefan Olafsson, a professor of sociology at the University of Iceland.
He’s studied the effect that Iceland’s economic boom had on the nation’s attitudes toward wealth. One year before everything collapsed, Icelanders bought more Range Rovers than the citizens of Denmark and Sweden combined. Now, Olafsson says his countrymen are wary of extravagance.
Before the crisis, billionaires “were the personification of what people believed in: materialism,” he said in an interview. “Since the collapse, their image has been tarnished, and what they were considered to be a symbol of -- successful business and financial genius -- is no longer valued.”
Accounting Fraud
That means the risks the former billionaires took to achieve their status probably won’t be repeated, Olafsson said.
Seventy-two-year-old Gudmundsson, who was sentenced to 12 months in jail in 1991 for accounting fraud at failed shipping company Hafskip, bounced back from that setback to make millions producing soda pop in Russia.
He and his son, Bjorgolfur Thor Bjorgolfsson, moved to St. Petersburg in 1993, securing a production deal with PepsiCo Inc. a few years later. The soda company he started was bought by Pepsi, giving Gudmundsson the funds to start producing beer in Russia. That business was bought by Heineken N.V. in 2002 for $400 million.
Gudmundsson then returned to Iceland and partnered with Magnus Thorsteinsson to buy a 45.8 percent stake in Landsbanki Islands hf, the island’s largest lender at the time.
In 2003, Gudmundsson was ranked Iceland’s fifth most- trusted business person by newspaper Frettabladid. The most trusted was Johannes Jonsson, the father of Baugur co-founder Johannesson, who ranked second.
Golden Years