March 9, 2011 / 1:53 PM / in 8 years

Tchenguiz brothers held in Kaupthing raid: source

LONDON (Reuters) - Tycoons Vincent and Robert Tchenguiz were among nine people arrested on Wednesday in police raids connected with a probe into the collapse of Iceland’s Kaupthing bank, a source close to the operation said.

Britain’s Serious Fraud Office (SFO) said it coordinated the raids that took place at 12 addresses in London and Reykjavik and involved 135 police officers and SFO investigators. Seven men aged 42-54 were arrested in London and two aged 42 and 43 held in Iceland.

The SFO would not confirm whether the London-based real estate investors and property developer Tchenguiz bothers had been arrested as part of the investigation. A Reuters reporter saw police vans parked outside their offices in Mayfair and Park Lane in London.

A spokesman for Vincent Tchenguiz said a statement would be issued shortly, but declined to comment further.

Nobody else at the Tchenguiz brothers’ offices in London’s upmarket Mayfair district was immediately available for comment.

Vincent Tchenguiz had planned to host a press party on his boat, Veni Vidi Vici, in Cannes, southern France, on Thursday. The industry is converging on the French Riviera this week for the annual MIPIM property conference.

Iceland’s main commercial banks — Kaupthing, Landsbanki and Glitnir — collapsed in the space of a week more than two years ago, imploding under the weight of huge debts racked up during years of aggressive overseas expansion.

In January, Iceland’s Special Prosecutor’s Office searched several financial institutions, including the central bank, as part of a criminal investigation into the collapse of another Icelandic bank, Landsbanki.

The Iranian-born Tchenguiz brothers amassed a real estate portfolio worth up to 4 billion pounds ($6.5 billion) during a series of UK property booms.

Additional reporting by Rosalba O'Brien, Andrew MacDonald and Paul Hoskins; Editing by Andrew Callus

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