Tycoons in £100m war on fraud police
Flamboyant brothers threaten to sue over botched investigations after the collapse of Icelandic bank
FLAMBOYANT property tycoons Robert and Vincent Tchenguiz could sue the Serious Fraud Office for £ 100million following the collapse of Britain’s biggestever fraud inquiry. The brothers – who were arrested as they prepared to stage a champagne party on their yacht in Cannes – were questioned as part of an investigation into the collapse of Icelandic bank Kaupthing.
However, the inquiry quickly became bogged down in legal disputes which exposed procedural blunders by SFO officials.
Yesterday, in a humiliating climbdown, the agency dropped its inquiry into Robert, 52, just four months after ending its case against his 55-year-old brother.
Now Robert is threatening to join Vincent, who has issued a £100million ‘letter before action’ over compensation. The claim would almost certainly break the agency, which faces questions over its future and ability to handle the most complex cases.
The brothers – who are said to have had a combined wealth of £4billion before the 2008 banking crisis – are renowned for their playboy lifestyle.
As well as the £30million London mansions, and offices adorned with Damien Hirst sculptures, there were dates with beautiful models and a place at the table alongside the movers and shakers of society.
They bought their first property –a£ 47,000 one- bedroom flat in London’s Marble Arch in 1979 – after their father, the Shah of Iran’s former jeweller, gave them £1million with which to go into business. Just six months later, they had sold it for £73,000.
Before long, the brothers were major London landlords, renting out flats to students and tourists. Soon after, they founded their company, Rotch. The pair have continued to live a jet-set lifestyle. In 2010, despite reports that he lost £1billion in just 24 hours in the collapse of the Icelandic banks, Robert had allegedly commissioned a 200ft yacht.
The tycoon – who it is claimed introduced Dodi Fayed to Princess Diana – also continued to live in a £30million five- storey house next to the Albert Hall.
It was reported last year that Vincent still manages a £10million yacht and has kept hold of his car collection, which included a Lamborghini, two Rolls-Royces, two Bentleys and an Aston Martin.
In a statement yesterday, SFO director David Green said he has discontinued the investigation because there is ‘ insufficient evidence to justify its continuation’.
The SFO moved in during a probe into the collapse of Kaupthing, one of three Icelandic banks which failed in October 2008.
The fraud inquiry was one of the biggest-ever seen in Britain, with senior Tory donor, at least one multi-millionaire and a leading luxury property developer all being dragged into the net. They are now not under suspicion. At one point, investigators even considered sending undercover officers into the Mayfair nightclub Annabel’s to gather evidence.
The Iranian brothers, who once owned 1 per cent of all British residential property, were arrested in March last year after questions were raised over the circumstances in which they secured huge cash loans against their property portfoit
‘Arrested on their
yacht in Cannes’
lios while also being depositors. The close links between the bank and one of its major investors was key to a 2,300 page report ordered by the Icelandic parliament.
It identified Robert as the ‘largest debtor’ in Kaupthing as well as a shareholder in Exista, an investment company that was the biggest shareholder in Kaupthing.
In July, the High Court set aside warrants against both Tchenguizes, after finding that they had been unlawfully obtained. A month later ruled the agency had acted unlawfully and unfairly in its search of the Tchenguizes properties.
In a damning verdict two judges questioned whether the SFO was adequately funded and accused it of being incompetent.
Earlier this year it also emerged that the SFO had secretly offered to accept a £50million payment to charity from Robert in return for closing its investigation.
The climbdown is another setback for the organisation following a series of high-profile failures.
In 2006 the SFO caved into pressure by halting the investigation of alleged corruption at BAE Systems. Its cases against employees of DIY chain Wickes and Durex maker SSL also collapsed.
In a statement, Robert Tchenguiz said he ‘welcomed the decision by the SFO to clear him formally of any wrongdoing in the collapse of Kaupthing Bank’. He added: ‘I look forward to closing this chapter and getting on with business.’
An SFO spokesman insisted a closed case was not a failed case. He added: ‘It would be unrealistic to expect every investigation to lead to a prosecution.’