(Adds comments by Robert Tchenguiz, background)
By Kirstin Ridley
LONDON, July 31 Britain's Serious Fraud Office
has averted a 300 million-pound ($500 million) damages claim
over its botched investigation into the Tchenguiz brothers,
securing a second out-of-court settlement and closing an
embarrassing chapter in its history.
Property barons Robert and Vincent Tchenguiz, renowned for
their champagne-fuelled parties and super yachts, sued the
agency over dawn raids on their homes and offices and their
high-profile arrests in March 2011 in a case linked to the 2008
collapse of Iceland's Kaupthing bank.
David Green, who took over as head of the agency one month
later, has secured a 4.5 million-pound deal with the brothers,
excluding hefty legal costs. The deal averts an October civil
trial and further public airing of the SFO's handling of a case
that has already been slated as "incompetent" by a senior judge.
Just days after Vincent agreed to settle his dispute with
the SFO for 3 million pounds, the SFO said on Thursday it had
reached a similar 1.5 million-pound deal with Robert. It again
offered its "deep regrets" for its errors.
"I am pleased that we have been able to resolve this final
outstanding matter without the need for a costly trial," said
Green, who dropped the investigation into the brothers in 2012.
"On behalf of the SFO, I also apologise to Robert Tchenguiz
for what happened to him. I reiterate that the SFO has changed a
great deal since March 2011, and I am determined that the
mistakes made over three years ago will not be repeated."
The Iranian-born Tchenguiz brothers have argued that the
publicity surrounding the raids and arrests three years ago
inflicted lasting damage on their reputations and businesses.
But Robert said he was satisfied that the taxpayer, which
funds the SFO to the tune of around 34 million pounds per year,
should not bear the full financial pain of the "misguided
actions" of the agency and its former head Richard Alderman.
"The most important thing to me is that the SFO has now
apologised to me for the wrongs suffered and has, finally,
cleared my name," he said. "Reputation is all in the business
community and I have at last had mine restored."
Vincent and Robert blame what they call "external
influences" for the "hugely damaging farce" that led to their
arrest for suspected wrongdoing and have vowed to pursue those
they say are responsible and liable for the damage caused.
Vincent has said he is considering his options against a
number of third parties, including UK auditor Grant Thornton. He
has yet to launch any action, however.
Vincent's lawyers alleged in February that two employees of
Grant Thornton - partner Steve Akers and Mark McDonald, a
director - gave the SFO "misleading and inaccurate" information
that sparked the flawed SFO probe and cost the brothers more
than 2.5 billion pounds.
Robert said only that he intended to join his brother in
pursuing unnamed third parties.
Grant Thornton has said it acted appropriately and in
accordance with its responsibilities and legal obligations.
Akers and McDonald, who is based in the British Virgin Islands,
were not immediately available for comment.
The Tchenguiz business empire, which once included large
stakes in retailer J Sainsbury and a vast portfolio of property
assets, was severely dented after the banking collapse in
Iceland in which British retail depositors also lost millions.
($1=0.5926 British pounds)
(Editing by David Holmes and Greg Mahlich)