Tuesday, October 16, 2012

Bungling British Fraud investigators

Bungling is British

Flamboyant property tycoons Robert and Vincent Tchenguiz could sue the Serious Fraud Office for £100million following the collapse of Britain’s biggest-ever fraud inquiry.

The brothers – who were arrested as they prepared to stage a champagne party on their yacht in Cannes – were questioned as part of an investigation into the collapse of Icelandic bank Kaupthing.

However, the inquiry quickly became bogged down in legal disputes which exposed procedural blunders by SFO officials.

Yesterday, in a humiliating climbdown, the agency dropped its inquiry into Robert, 52, just four months after ending its case against his 55-year-old brother.

Now Robert is threatening to join Vincent, who has issued a £100 million ‘letter before action’ over compensation. The claim would almost certainly break the agency, which faces questions over its future and ability to handle the most complex cases.

The brothers – who are said to have had a combined wealth of £4billion before the 2008 banking crisis – are renowned for their playboy lifestyle.

They bought their first property – a £47,000 one-bedroom flat in London’s Marble Arch in 1979 – after their father, the Shah of Iran’s former jeweller, gave them £1million with which to go into business. Just six months later, they had sold it for £73,000.

Before long, the brothers were major London landlords, renting out flats to students and tourists. Soon after, they founded their company, Rotch. The pair have continued to live a jet-set lifestyle. In 2010, despite reports that he lost £1billion in just 24 hours in the collapse of the Icelandic banks, Robert had allegedly commissioned a 200ft yacht.

In a statement yesterday, SFO director David Green said he has discontinued the investigation because there is ‘insufficient evidence to justify its continuation’.

The SFO moved in during a probe into the collapse of Kaupthing, one of three Icelandic banks which failed in October 2008.

The fraud inquiry was one of the biggest-ever seen in Britain, with a senior Tory donor, at least one multi-millionaire and a leading luxury property developer all being dragged into the net. They are now not under suspicion. At one point, investigators even considered sending undercover officers into the Mayfair nightclub Annabel’s to gather evidence.

The Iranian brothers, who once owned 1 per cent of all British residential property, were arrested in March last year after questions were raised over the circumstances in which they secured huge cash loans against their property portfolios while also being depositors. The close links between the bank and one of its major investors was key to a 2,300 page report ordered by the Icelandic parliament.

In July, the High Court set aside warrants against both Tchenguizes, after finding that they had been unlawfully obtained. A month later it ruled the agency had acted unlawfully and unfairly in its search of the Tchenguizes properties.

In a damning verdict two judges questioned whether the SFO was adequately funded and accused it of being incompetent.

Earlier this year it also emerged that the SFO had secretly offered to accept a £50million payment to charity from Robert in return for closing its investigation.

The climbdown is another setback for the organisation following a series of high-profile failures.

In 2006 the SFO caved into pressure by halting the investigation of alleged corruption at BAE Systems. Its cases against employees of DIY chain Wickes and Durex maker SSL also collapsed.

In a statement, Robert Tchenguiz said he ‘welcomed the decision by the SFO to clear him formally of any wrongdoing in the collapse of Kaupthing Bank’. He added: ‘I look forward to closing this chapter and getting on with business.’

An SFO spokesman insisted a closed case was not a failed case. He added: ‘It would be unrealistic to expect every investigation to lead to a prosecution.’

Original report here

(And don't forget your ration of Wicked Thoughts for today. Now hosted on Wordpress. If you cannot access it, go to the MIRROR SITE, where posts appear as well as on the primary site. I have reposted the archives (past posts) for Wicked Thoughts HERE or HERE or here

No comments: