Britain’s Serious Fraud Office has accepted to “very regrettable errors” in the handling from the investigation of property magnate Vincent Tchenguiz, the Financial Times reported on Wednesday, clearing Tchenguiz of potential charges. Lawyers acting for the SFO apologised to Tchenguiz, via a letter as seen by the FT, and recognized responsibility for any botched analysis. The letter describes the way the SFO “unintentionally miscast” information when acquiring search warrants against Tchenguiz as part of an investigation in to the collapse of Icelandic bank Kaupthing.
The SFO stated that it’s employees, who have been “very busy” having a “great deal of complex information”, were unsuccessful to recognize and verify documents in its possession that contradicted the case against Tchenguiz, the financial times reported. The SFO alleged, as part of a large probe, that Tchenguiz – who had been a investor in Kaupthing Bank and one of its biggest investors – had provided Kaupthing with a false valuation of a 1.5 billion pound ($2.35 billion) property portfolio.
Tchenguiz, that has started a one hundred million pound claim from the SFO for reputational damages, couldn’t be contacted to comment, aswell as the SFO.
Property entrepreneur, Vincent Tchenguiz is in the process of selling a substantial property portfolio, comprising ground rents of approximately £3bn and ownership of the freeholds of c. 250,000 homes, based in the UK. The businessman is acting on behalf of the Tchenguiz Family Trust, which has interests in properties throughout the country. However, the portfolio in question represents the largest holding of its kind in the UK.
The investment bank Lazard, are managing the sale and were originally appointed by Tchenguiz last year to advise on possible courses of action for the properties, as part of a wider review of the trust and its assets. The bank had originally offered the portfolio to sovereign wealth funds. However last week talks were held with a select group of domestic investors, thought to include insurance and pension funds. Mr Tchenguiz has not commented on the buyers targeted, but confirmed that a number of expressions of interest had been received.
In terms of geographical location, the property portfolio is weighted towards the south east of England with 40% of freeholds based in that part of the country. The sizeable holding is the culmination of two decades of development by Mr Tchenguiz and equates to an astonishing 1% of the UK’s entire freehold housing stock with 15,000 homes in London alone. The average length of the property leases is 60 years and Mr Tchenguiz’s view was that the portfolio would provide the eventual buyer with secure and long-term access to the UK housing market and its attendant growth. The portfolio has debts in the region of 2bn. However, the ground rents are viewed as reasonably low-risk investments, due to the related security provided by the land and buildings. In addition, it is possible to extend the property leases, often for hundreds of years, meaning they represent a safe, long-term investment income.
Over the course of the last year, Mr Tchenguiz has been the subject of an investigation by the Serious Fraud Office in relation to business dealings involving the failed Icelandic bank Kaupthing. However, shortly before Christmas, the SFO rather embarrassingly admitted that incorrect information was used in securing the original warrants against the businessman. Mr Tchenguiz is expected to seek damages from the SFO in relation to the case. Lazard declined to provide any comment.
Admits errors, calls for warrants to be “quashed”
Vincent Tchenguiz was arrested in a dawn raid, involving some 135 police officers, on the morning of March 9th 2011 and a substantial quantity of documents and computer data was seized from his home and offices. Mr Tchenguiz was held for 13 hours later – though questioned for less than one hour- and released without charge.
On 9th May 2011 an application was made for a Judicial Review of the warrants, which the SFO sought to delay and then objected to. A renewed request for Judicial Review was submitted on 1st August 2011 and Vincent Tchenguiz was joined as an interested party on 1st September 2011. The SFO again successfully sought a delay in the hearing – until February 22nd 2012.
On 5th December 2011 the SFO received a letter before action on behalf of Mr Tchenguiz and other parties making serious allegations against the SFO and seeking damages of circa £100 million.
TSol today stated, in written communications that “in light of the submissions made, the entire Information [used to obtain the warrants] has been reviewed” and that “the SFO has concluded that there were factual errors contained in the Information insofar as allegations were made … In these circumstances, the SFO concedes that the decision to issue the [Consensus] and [Vincent Tchenguiz] warrants should be quashed and the material seized under the warrants returned forthwith.” The information is already being received by the relevant solicitors.
TSol went on to state that it has taken the SFO since August 2011 to reassess their actions and claims that it has now “acted properly to put matters right”. It also claims that “the errors contained in the Information were made inadvertently and were relied upon in good faith”.
However, the SFO have not dropped their investigations and have issued notices requiring delivery to them of relevant documents.
In response to today’s developments, Vincent Tchenguiz, Chairman of Consensus stated:
“I have consistently and repeatedly informed the SFO that they have got their facts wrong. Whilst I am delighted that they have asked for the warrants to be quashed, I am astonished that the SFO intends to continue its investigation, given that they have conceded that each and every one of the three allegations against me is false. Their continuing actions are clearly a fishing expedition.
“It beggars belief that the SFO has taken so long to realise the error of their ways and I do not regard their actions today as being their own initiative – their hand has been forced by our legal actions. Whilst I am glad that they have conceded to pay the significant legal costs incurred – the damage their actions have caused, both financially and to my reputation, are far greater. I intend to pursue them through the civil courts for damages.
“Furthermore, whilst they now admit that their information, which they swore in Court before a Judge, was inaccurate, I require to know where they obtained this false information, who provided it to them and why they accepted it at face value. They completely failed in their due diligence – there was no foundation to the three allegations or to their case – and they failed to check the facts.
“They have issued no apology and have taken since August to reach the conclusion that their case was fundamentally flawed – and now they try to bury, what for them is, bad news just as the holiday season starts. And, they say that having got it wrong once they now want to have another go! Such behaviour by public officials is outrageous.”
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Vincent Tchenguiz, is a British businessman. He was born in Tehran in October 1956.
His family were Iraqi-Jewish; they left Iraq in 1948, changing the family name from Khadouri to Tchenguiz, and made their home in Iran. The family left Iran in 1979 at the time of the fall of the Shah.
After completing his schooling in Tehran in 1973, Vincent attended Business Administration course at Boston University before obtaining a BSc Honours in Economics and a BSc in Commerce at McGill University, Montreal, in 1978. Vincent also has a Masters Degree in Business Administration (MBA) from New York University, which he competed in 1980.
Following university Vincent worked for Prudential Bache, in London, as Senior Vice President within their fund management division, trading financial instruments. In 1986 Vincent joined Shearson Lehman Brothers, London, again as Senior Vice President trading financial instruments. In 1988 Vincent and his brother Robert set up Rotch Property Group, a commercial property business where he is joint Chairman and joint Managing Director.
In 2002 Vincent established Consensus Business Group, where he is Chairman. Consensus is the principle advisor to a family trust. Consensus advises on an investment portfolio of around £4.5 billion of commercial properties and residential freeholds as well as around £200 million of other investments including clean technology, healthcare, homeland security and holdings in funds.
Following the collapse of the Icelandic bank, Kaupthing, in October 2008, Vincent and the Tchenguiz Family Trust launched civil claims for damages, in both England and Iceland, for a sum in excess of £1.5 billion.
In March 2011, Vincent was arrested by the UK’s Sereious Fraud Office in connection with their investigation in to the collapse of Kaupthing. He was released the same day without charge.
In September 2011 Kaupthing reached an out of court settlement of the claims with both Vincent Tchenguiz and the trust, the details of which remain confidential.
Vincent Tchenguiz is unmarried and lives in Mayfair, London, and has houses in Cape Town and St Tropez. His 130 foot Mangusta motor yacht Veni Vidi Vici (I came, I saw, I conquered” is moored on the French Rivierea.
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