The Tchenguiz brothers were left vowing to launch a vigorous defence of their name this week following their dramatic arrests in connection with a Serious Fraud Office probe into the collapse of Icelandic bank Kaupthing. Sources close to the pair said they regarded the handling and timing of their arrests as “curiously stage-managed” to coincide with the first day of the MIPIM property fair and intended to cause maximum embarrassment. Earlier the brothers released a statement saying they were confident they would be cleared of any allegation of wrongdoing. Others – believed to include Robert Tchenguiz’s right-hand man Tim Smalley – were questioned in the operation. The Mayfair and Park Lane offices of the brothers, who made their fortunes from highly leveraged property deals during the boom, were shut down and searched in the operation involving 165 police officers. A total of nine people were arrested and released without charge on Wednesday night. By Thursday afternoon, Vincent had told guests that an open party on his yacht Veni Vidi Vici would still be taking place that evening. The SFO said its investigation is focused on the decision-making processes “which appear to have allowed substantial value to be extracted” from Kaupthing in the immediate run-up to its collapse in 2008. Robert Tchenguiz was the bank’s biggest single borrower, granted loans worth around £1.7bn to build corporate stakes. In the months leading up to Kaupthing’s collapse, the bank lent Tchenguiz £170m to meet margin calls from other banks. He also owned 1.5% of Kaupthing’s shares and was a board director of the bank’s biggest shareholder, investment vehicle Exista. In February, a family trust controlled by Robert sued Kaupthing for allegedly misrepresenting its financial health. The bank’s administrators are defending that claim. Despite their losses during the downturn, the brothers are still thought to own combined property holdings of more than £1bn in value.
The Tchenguiz brothers were left vowing to launch a vigorous defence of their name this week following their dramatic arrests in connection with a Serious Fraud Office probe into the collapse of Icelandic bank Kaupthing. Sources close to the pair said they regarded the handling and timing of their arrests as “curiously stage-managed” to coincide with the first day of the MIPIM property fair and intended to cause maximum embarrassment. Earlier the brothers released a statement saying they were confident they would be cleared of any allegation of wrongdoing. Others – believed to include Robert Tchenguiz’s right-hand man Tim Smalley – were questioned in the operation. The Mayfair and Park Lane offices of the brothers, who made their fortunes from highly leveraged property deals during the boom, were shut down and searched in the operation involving 165 police officers. A total of nine people were arrested and released without charge on Wednesday night. By Thursday afternoon, Vincent had told guests that an open party on his yacht Veni Vidi Vici would still be taking place that evening. The SFO said its investigation is focused on the decision-making processes “which appear to have allowed substantial value to be extracted” from Kaupthing in the immediate run-up to its collapse in 2008. Robert Tchenguiz was the bank’s biggest single borrower, granted loans worth around £1.7bn to build corporate stakes. In the months leading up to Kaupthing’s collapse, the bank lent Tchenguiz £170m to meet margin calls from other banks. He also owned 1.5% of Kaupthing’s shares and was a board director of the bank’s biggest shareholder, investment vehicle Exista. In February, a family trust controlled by Robert sued Kaupthing for allegedly misrepresenting its financial health. The bank’s administrators are defending that claim. Despite their losses during the downturn, the brothers are still thought to own combined property holdings of more than £1bn in value. paul.norman@estatesgazette.com
