Hedge fund manager Chris Rokos has reached a settlement with Deloitte over claims that he was given bad advice on an investment in Tyneside’s enterprise zone 14 years ago.
The billionaire had sued the professional services firm in London’s High Court, alleging Deloitte was in breach of its duties, resulting in a £40m tax bill for Rokos.
Rokos invested £100m in the Tyne Riverside scheme, including £40m of his own cash and the rest funded by a non-recourse loan.
Promoters of the scheme had intended to construct a data centre on the site.
The claim said Rokos anticipated his investment would allow him to reduce his taxable income for the year by £100m, resulting in a tax saving at the higher 40% rate that applied at the time. As a result, he believed that even if the investment itself incurred losses, the £40m in tax savings would allow him to mitigate them.
However, HM Revenue & Customs rejected the tax claim and issued Rokos with a demand to pay in 2016. The investment itself was “a commercial failure”, the claim said.
