SFO drops Tchenguiz case

The Serious Fraud Office has confirmed that its investigation into property tycoon Vincent Tchenguiz has been dropped.

The Serious Fraud Office has confirmed that its investigation into property tycoon Vincent Tchenguiz has been dropped.

Last month, Debevoise & Plimpton’s Lord Goldsmith QC questioned whether the SFO was fit for purpose after it admitted mistakes in its dawn raids on the Vincent Tchenguiz and his brother Robert in March 2011.

Vincent Tchenguiz is pursuing the SFO for £100m damages to his business empire because of the negative publicity and disruption caused by last year’s investigation.

Today, the SFO confirmed its position.

A spokesman said: “We can confirm that the SFO yesterday notified Vincent Tchenguiz there is no longer reasonable grounds to consider him a suspect in the investigation into the collapse of Kaupthing bank.

“Arrangements are underway for the cancellation of his bail.

“The review by the SFO director related only to Vincent Tchenguiz. This followed the concessions made by the SFO regarding errors in the judicial review proceedings.

“There is no change to the status of Mr Robert Tchenguiz.

“Errors made in this investigation have been admitted. These are regretted. However, the important consideration now is to await the judgment before commenting further.

“The Kaupthing investigation is ongoing and we are still awaiting judgment in the judicial review proceedings.”

That is likely to come in the next few weeks.

Goldsmith was instructed by Wilmer Hale litigation partner Stephen Pollard for Vincent Tchenguiz, with Matrix Chambers’ Ben Emmerson QC and Cloth Fair Chambers’ Jonathan Barnard also instructed.

The former director of public prosecutions, Matrix Chambers’ Lord Macdonald QC, is acting for Robert Tchenguiz alongside fellow Matrix silk Alex Bailin and Cloth Fair’s Clare Sibson. The counsel are instructed by BCL Burton Copeland partners Ian Burton and Richard Sallybanks.

Both legal teams appeared at last month’s judicial review hearing (25 May 2012) brought by the Tchenguiz brothers into alleged failings by the SFO investigation into their business dealings following the collapse of Iceland bank Kaupthing in 2008. It is one of the largest and most complex that the SFO has handled.

The failings in parts of the long-running case has led to widespread criticism of the SFO and has caused the fraud agency embarrassment.

Its new director David Green QC, who conducted the internal review into the Tchenguiz investigation, was represented at the same hearing by Blackstone Chambers’ James Eadie QC.

At the judicial review, Goldsmith claimed the dawn raids which led to the brothers’ arrests were flawed and illegal because the search warrants were incorrect.

They were questioned about containing high vale loans from the bank on the back of deception, but it emerged that the SFO had material which contradicted those allegations.

The SFO has not admitted mistakes in its arrest of Robert Tchenguiz and insists the investigation continues.

Vincent Tchenguiz said: “It is nearly 15 months since the SFO had me arrested – in a publicity-driven dawn raid. Since that time I have maintained my innocence. I have consistently explained to the SFO that they had got it completely wrong but, as their investigation collapsed around their ears, they stubbornly maintained that they regarded me as a suspect. The damage to my reputation and the business has been massive.
“It is a huge relief that, under the new Director of the SFO, this shadow has now been lifted and I can get on with rebuilding my life and my business interests. The damage, however, has still to be accounted for.”

Representing the Rawlinson & Hunter Trustees & Others (the trustees of the Tchenguiz family trust) in the judicial review was Stephenson Harwood partner Sean Jeffrey. He instructed 3 Raymond Chambers silk Hugo Keith QC and Matrix Chambers’ Jonathan Glasson.

Vincent Tchenguiz’s in-house litigation team included Alison Bradley, Laura Simmonds and Andrew Peach.