The former boss of Icelandic investment group Baugur, which owned stakes in a raft of British retailers, including Hamleys, House of Fraser and Iceland, has been charged with fraud.

Jon Asgeir Johannesson, who used to be one of the most powerful men in British retail, faces allegations in Reykjavik that he exerted undue influence on Glitnir, the collapsed Icelandic bank that funded most of Baugur’s expansion, according to Bloomberg.

The former chief executive of Glitnir, Larus Welding, and two former directors are also understood to have been charged with fraud.

The former executives are accused of breaching their authority in approving a loan to a holding company in the months before Glitnir collapsed, amid the Icelandic banking meltdown, while Johannesson, whose investment firm FL Group was the largest shareholder in the bank, is accused of exerting pressure to get the loan approved.

Baugur filed for bankruptcy in March 2009 with debts of more than £1bn.