U.K. Serious Fraud Office Director David Green will decide whether the agency should continue its investigation into real estate investor Vincent Tchenguiz in connection with the collapse of an Icelandic bank.
Green will complete the review by June 18 and will also return some materials seized during the investigation, according to a statement filed by the SFO with a London court.
Vincent and Robert Tchenguiz were granted a judicial review their March 2011 arrests during SFO criminal investigation into the collapse of Iceland’s Kaupthing Bank Hf, which the men claim were unlawful because the warrants were obtained with incorrect information. They are seeking about 100 million pounds ($160 million) in damages from the SFO.
“That’s as close as I have ever seen to a prosecuting authority saying ‘We think we may have to stop this investigation,’” Vincent Tchenguiz’s lawyer Peter Goldsmith said of the today’s statement from Green. “There is no continuing basis to investigate Vincent Tchenguiz.”
SFO lawyers said in April that the agency was conducting an internal review into “errors” in the arrest and searches of Tchenguiz offices. While it said the review was complicated by staff departures, Judge John Thomas denied a request for more time to prepare for trial and scheduled today’s hearing.
Green, the SFO director, apologized for the timing of the decision and said in today’s statement, “these are complex factual allegations, necessitating very careful assessment, expert analysis of underlying documentation and consideration within the broader context of the SFO’s ongoing investigation” into Robert Tchenguiz, and his relationship with Kaupthing executives.
Ken Macdonald, Robert Tchenguiz’s lawyer, said the SFO’s suspicions about transactions between his client’s companies and Kaupthing were based on wrong or inaccurate information and his arrest and the search warrants were therefore unlawful.
Goldsmith said the SFO had conceded the searches and seizures of Vincent Tchenguiz’s properties were unlawful and his claim for damages was transferred to another court to be heard as a civil claim.
The allegations against Vincent, that he overvalued collateral for loans and failed to disclose senior lenders, have been shown to be false, Goldsmith said. The SFO should have questioned information it received from Grant Thornton U.K. LLP about potential wrongdoing, as the firm represented Kaupthing’s resolution committee, which was involved in a 1.5 billion-pound legal dispute with Vincent, the lawyer said.
Grant Thornton said in an e-mailed statement that it acted appropriately.
“Any disclosure made has been accurate and in accordance with those professional and legal obligations,” according to the statement.
The case is Robert Tchenguiz v. Director of the Serious Fraud Office & Anr, High Court of Justice, Queen’s Bench Division, Administrative Court, CO/4468/2011.
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