By Brian Rix
Nearly three and a half years after the Tchenguiz brothers were arrested on March 9 2011, the farcical case at last comes to an end.
Vincent gets a groveling apology plus a £3 million bung from the Serious Fraud Office – or the Serious Farce Office – which also has to pay an initial £3 million for Vincent’s legal costs with more to be negotiated.
Throughout the case, some of you will have followed the sheer ineptitude of the SFO with wonder.
Accountants Grant Thornton, acting as receiver for the Icelandic Kaupthing bank, had taken control of some of assets which fell under the control of the Tchenguiz Family. It provided information to the SFO, which then believed a fraud had been committed.
What has never been explained is that somehow while working with the SFO, Grant Thornton felt it appropriate to reach a deal with Vincent to sell him back some of the freehold assets they were holding.
It is quite possible – even likely – that some of these were the assets that had been claimed to be part of the alleged fraud.
Eventually the SFO case collapsed and the SFO accepted it was inept. The new head, David Green, made the decision to close the case.
The brothers applied for judicial review and successfully demonstrated that they had been arrested on incorrect evidence.
Over three days in May 2012, the legal peacocks Lords Goldsmith (former Blairite Attorney General), acting for Vincent, and McDonald (former Director of Public Prosecutions), acting for Robert, preened themselves in court.
They were assisted by legal birds of less colourful plumage: assorted crows and magpies.
The Serious Farce Office arrived with a modest legal team assembled at the last minute.
The peacocks made their dance and took the judges to the “Pennyrock” loan to show there was no fraud.
So clean was that particular loan that there were no less than six places in the document that demonstrated that nothing untoward was lurking.
At times, even the judges struggled under the volume of documentation. The SFO barristers looked flustered, dashing from bundle A to F to J under Lord Goldsmith’s onslaught.
At one point, the City of London Police with an even smaller legal bird cheeped, in effect: “My Lords, my client was only acting as the plod told to follow orders from the SFO and arrest these two gentlemen of fine character.”
Meanwhile, sitting in the stalls some of the Serious Farce Office staff found it difficult to follow the trial as they spent too much time visiting the toilet hoping not to be called to account for not knowing their credits from their debits, or their elbow from other parts of their anatomy.
Some press were there, well briefed journalists from the Financial Times somehow seemed to be able to interpret the Tchenguiz bothers’ every thought. Quite why the FT journalists have been such assiduous reporters of the Tchenguiz’s travails at the hands of the authorities is unknown.
Other strange people sat in the court, some looking like ex-plod noting who was there on behalf of the SFO. As well as his QCs, Vincent deployed other technical experts to make sure they understood the numbers – and, of course, his long standing and now departed PR fixer.
The SFO was shown to have acted wrongly and Vincent was awarded cost of £3 million.
Then the Tchenguiz brothers went to town in seeking £300 million compo from taxpayers for their trauma and distress.
That’s ten times the SFO budget.
[mc4wp_form]So the SFO then found some more money from the Treasury to prepare for this hearing. They did not quite tell the truth when things came before parliament they said it was for various projects … oh, and the Tchenguiz case.The case was to have taken place in October, but the SFO decided to sell out, at least to Vincent.
Vincent has settled for £3 million – or one per cent of what the bothers were claiming off taxpayers.
The SFO – to date – is defending the action from Robert. It is an open question whether the SFO will settle with him, too.
Those responsible for the SFO debacle have gone, having awarded themselves pay-offs that were so large Parliament got upset. Of course, we did not get any money back.
One is now teaching the rest of the world how to stop fraud.
What next for the SFO?
It is going to stick to nice, easy cases – like minor City transgressors who have upset their employers.
As for serious fraud, forget it.
Related posts:
Whistleblowers to Serious Fraud Office ‘wasting their time’
Tchenguiz’s compo claim ‘liberally interspersed with assertions of fraud, falsity, dishonesty …’, says judge
What part of ‘Go away!’ don’t you understand, Vincent?
Grant Thornton had ‘direct interest’ in the Tchenguiz arrests, which should have been revealed
Tchenguiz brothers fall out among themselves, says The Times
This particular case would make a good script for a christmas pantomime…The amount of money this whole fiasco has cost the british tax payer is disgusting…..
Karen,
It might make a good christmas pantomime, provided Peverel do not manage the mainger!
Karen,
It could have been worse! According to Mr Tchenguiz one of the reasons he agreed to accept a settlement of £3m compensation plus £3m legal costs, was because he wanted to save the taxpayer money! He now wants to sue Grant Thornton and Kaupthing Bank.
And yet again the civil servants are paid off, not fired or even sued for failing to discharge their duties properly, likely, as we see, they are no financial match let alone an intellectual one for big business. Of course if they don’t have financial gold parachutes even the scrapings that work in senior capacities for the civil service ,will find work elsewhere instead.
That the SFO messed up and were outgunned is true. However a great deal that is good has resulted from the SFO action. Since the SFO had already admitted to serious errors, Tchenguiz had already won that part of the case.. The issue to be settled was to demonstrate before a court the extent of losses to Tchenguiz as a result of the SFO action. Estimates of the Tchenguiz claim vary between £200m-£300m.. Remember Tchenguiz blamed the SFO raid for Merril Lynch calling in their loan which led to the collapse of Peverel. The SFO in trying to mitigate their liability argued that Tchenguiz was already in financial trouble before the raid. Had the case gone ahead, the only way Tchenguiz could have proved the extent of his losses would have been to open up his accounts in full before the court.. This was something he was reluctant to do. Infact he was prepared to sacrifice up to £297m of his claim to avoid his accounts being made public.
ME, well rounded argument good comment.
Campaign against retirement leasehold exploitation down all day?