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July 25, 2014 7:28 pm
Vincent Tchenguiz, the property entrepreneur, has accepted a £3m settlement from the UK’s Serious Fraud Office ahead of an October trial where he and his younger brother, Robert, were seeking a record £300m in damages over the agency’s botched criminal probe of the pair.
Mr Tchenguiz said in a statement on Friday that he had accepted a settlement involving a £3m payment from the SFO, which would also pay his legal costs from the long-running dispute.
The agency must pay the £3m in 14 days and has also agreed to pay £3m towards legal costs in the same timeframe. The rest will be negotiated.
Robert Tchenguiz is not part of the settlement and his case against the agency continues, his spokesman said. Robert is seeking £100m from the SFO, which has an annual budget of £36.5m. The damages he is seeking are the highest in the agency’s 26-year history.
The partial settlement will be a boon to the SFO, whose reputation was damaged by an earlier court ruling on its investigation of the brothers.
The agency was forced to seek £19m in emergency additional funding from the government this year, in part to cover its legal expenses related to the damages trial.
Vincent Tchenguiz said his settlement would end all of his disputes with the SFO.
He added: “It has become increasingly apparent that the SFO’s investigation was influenced by certain third parties, acting in their own commercial interests. It would not be fair for the SFO or indeed the public purse to bear sole responsibility for the actions of those third parties.”
He said he would focus his attention instead on “other parties” he considered responsible.
Mr Tchenguiz and his brother have argued in court that the SFO put too much faith in a report by individuals from Grant Thornton, an accountancy firm, whom they consider had a conflict of interest.
Grant Thornton has previously made clear it denies any such a conflict.
In February, the brothers won a ruling in the Court of Appeal, which upheld an earlier decision that Grant Thornton should disclose five reports that the SFO used as the basis to launch its investigation of the pair.
Two Grant Thornton individuals are liquidators of Oscatello, an investment vehicle of Robert Tchenguiz.
The SFO investigated the brothers as part of a probe of the 2008 collapse of Kaupthing, the Icelandic bank.
Robert Tchenguiz was a member of the board of the biggest shareholder in Kaupthing and was also one of the bank’s biggest borrowers in the months leading up to its collapse.
The brothers were arrested in high-profile dawn raids in Mayfair in March 2011.
They challenged the SFO through a judicial review in 2012, arguing the agency had not properly prepared evidence against them when it sought warrants.
The court severely criticised the SFO and quashed the warrants in a case that raised concerns about the agency’s ability to investigate and prosecute complex financial crimes.
David Green, newly installed as director at the time, moved swiftly to stop the agency’s investigation.
The SFO confirmed Friday’s settlement.
Mr Green said: “I am pleased that we have been able to resolve this matter without the need for a costly trial. The SFO deeply regrets the errors for which we were criticised by the High Court in July 2012. On behalf of the SFO I apologise to Mr Tchenguiz for what happened to him.
Robert Tchenguiz said he intended to continue to pursue his claim “to right the wrongs that have been done”.
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