Property developer, Vincent Tchenguiz has filed a £2.2bn damages claim in the Commercial Court. The claim is against auditor Grant Thornton, Icelandic bank Kaupthing, and three individuals – Stephen John Akers, Hossein Hamedani and Johannes Runar Johannsson.
The claim is a result of the collapse of an SFO investigation that was highly crticised over the dawn raids made on Tchenguiz.
Tchenguiz accuses the defendants of conspiring to instigate and be involved in the failed investigation by the UK’s Serious Fraud Office into Tchenguiz himself, Consensus Business Group and Tchenguiz Family Trust.
What is the basis of the claim?
It is alleged that the individuals named in the court documents conspired to put Vincent Tchenguiz the relevant companies “under acute commercial and financial pressure” in order that they would to settle a £1.6bn Commercial Court claim brought against Kaupthing.
It is also alleged by Tchenguiz that the individuals effectively controlled the SFO investigation, leading to search warrants being issued in against Mr. Tchenguiz in March resulting in his arrest.
The claim alleges that Grant Thornton and Kaupthing are vicariously liable for the actions of the individuals named.
What are the facts of the case leading to the claim?
In March 2011, the SFO conducted a series of dawn raids on numerous premises throughout Mayfair. The subjects of the raids were high-profile wealthy, entrepreneurs. The raids involved more than 130 investigators and police officers who raided the business premises of R20, Consensus Business Group and eight private residences with a similar operation being carried out in Iceland at the same time.
The investigation was launched to discover the circumstances that led to the Kaupthing bank’s collapse in the wake of the 2008 financial crisis.
The investigation was finally abandoned in 2012 following a series of issues delaying and hindering investigation.
This included a ruling by the high court that the search warrants used for the raids on Tchenguiz along with others were in fact illegal as there had been no substantive grounds for suspecting him of any criminal offence.
Tchenguiz’s home and offices in London were subject to dawn raids in March 2011. He alleges that the high-profile raids and investigation had repercussions for his business.
Mr Tchenguiz was exonerated from charges by the SFO and, in July, settled with the SFO for £3million plus costs. His younger brother was awarded £1.5 million. The pair had originally sought £300 million in damages
The case also involved Robert Tchenguiz, brother of Vincent, against whom all criminal investigations and charges were also dropped. He too sued the SFO, but reached a settlement out of court and received an apology.
Vincent Tchenguiz had used equity from his property development business to provide collateral for a loan granted by Kaupthing to his brother.
Both brothers sought £300m of damages from the SFO after as a result of the ruling that the search warrants used in the raid were illegal.
The judge accused the SFO of “sheer incompetence” for their failure in keeping a record of the information used to obtain the warrants.
Tchenguiz, on filing the damages claim said:
“It is clear to me that the Serious Fraud Office was deliberately manipulated into investigating me by people who intended to cause me harm and were driven by commercial gain and self-interest.”
He went on to describe the investigation as a “conspiracy” claiming that those involved used the SFO to meet their own ends.
Grant Thornton has denied the claims made by Tchenguiz on behalf of itself and the individuals who are partners of the firm. It said:
“Grant Thornton UK LLP, Steve Akers and Hossein Hamedani deny all of the claims made. We have all acted appropriately and in accordance with our professional responsibilities and legal obligations throughout. Given that this is now a matter of legal proceedings, we will not be commenting further at this time.”
Kaupthing also made comment, stating that they had not yet been served with court documents and were thus not in a position to make detailed comment. Kaupthing’s winding-up committee said:
“What we can however say is that the allegations made by Vincent Tchenguiz about the conduct of Kaupthing and Johannes Runar Johannsson have absolutely no basis in fact or in law and will be very vigorously contested.”
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This blog post is intended as a news item only – no connection between Lewis Nedas and the parties concerned is intended or implied.