The former heads of Baugur, an Icelandic group that invested heavily in British retailers, have been convicted of tax evasion.

The ex-chairman of Baugur, Jon Asgeir Johannesson, his sister Kristin Johannesdottir and their former co-worker Tryggvi Jonsson faced charges of tax evasion amounting to $2.4m (£1.5m) from 1998 to 2003.

Iceland's Supreme Court has ruled that: 'All the defendants are found guilty of a major infringement of tax laws. In determining the penalty for their actions, the delay in the case proceedings has to be taken into consideration.'

The court handed Johannesson a 12-month suspended sentence and a fine of 62m krona (£312,000), while Jonsson received an 18-month suspended sentence and a fine of 32m krona (£160,000). Johannesdottir, who headed the family's investment company that owned part of Baugur, received a three-month suspended sentence.

Baugur declared bankruptcy in 2009 following Iceland's economic collapse. The company held stakes in a range of British retailers, including Hamleys, House of Fraser, Iceland, and the clothing stores Oasis and All Saints.