Interview: Vincent Tchenguiz

Longer stuff
June 3, 2011

An afternoon with Vincent Tchenguiz, the property tycoon fighting to clear his name of fraud allegations linked to the collapse of Icelandic bank Kaupthing, makes you realise why cases like this take a team of accountants years to unravel.

For nearly 90 minutes, I’m bombarded with figures and facts, allegations and claims. At one point he brings out a dossier of colourful Power Point slides that provide a glimpse into a Kafkaesque nightmare. One shows a grid filled with words like “trial”, “mis-represent” and “not guilty”. Another shows indecipherable concentric circles plotting the relationships between the companies involved in the case.

He’s certainly frank and remarkably open – but open like a flood-gate, spewing forth an ocean of information that encompasses countless financing deals across dozens of companies and multiple law-suits fought in two jurisdictions. His long-suffering lawyer, who is accompanying us, often looks panicked, retrospectively asking me to place his comments off the record and reminding Vincent that he really should try not to slander people.

He speaks in half-sentences, in an accent thick enough to stand a spoon in, dipping in and out of near-incomprehensible business-talk. His company is infectious, almost child-like. He arrives at his Park Lane office with a food-stained tie draped over his shoulders and his shirt billowing open. The room is filled with blinking screens with live readings for the FTSE, S&P, and gold and silver prices. Scattered around, almost as an after-thought, are a Damian Hirst skull, model jets and a photograph, on the floor against a wall, of him with Bill Clinton.

As he flits from subject to subject, sometimes in the same breath, he has a way of drawing you in. With a conspiratorial glint in his eye he’ll say: “Let me show you how this is interesting…”

Although no charges have been brought, Vincent is suspected by regulators of inflating the value of companies used as collateral for a £100m loan from Kaupthing, which he denies. The matter came to a head in March when 130 police officers swooped on premises owned by him and his brother Robbie. He is surprisingly calm about the morning he was arrested – which he refers to as “the SFO [Serious Fraud Office] thing”.

“I wasn’t that fazed,” he says. “To be honest it was too early in the morning. I woke up, saw them, took a shower, went in the car. They were nice guys. They kept asking me questions but it was too early.”

He is less philosophical about the motivation for the raids. “The way the investigation was conducted was incorrect. It was too fast, too quick, too early and too much damage was done. It should be regulated so this kind of thing can’t happen.

“They have broken human rights. All sorts of human rights. Privacy by going into the house, damages, trial by media. I’ve already been tried in the press and I haven’t even been charged.”

He says the arrest and the ensuing media circus has had a devastating affect on his business. His property management company Peverel was forced into administration days after the arrests, when Bank of America demanded the repayment of a £136m loan. His other interests have suffered too: “We have to contract. We are letting out office space, restructuring. We might have to shrink back to much less foreign exchange trading. We’re a financial company, we rely on finance. We have transactions in South Africa, Canada, Israel and Holland – all on hold pending this investigation.”

In a classic Vincent change of direction, he goes on to say he is glad the situation was handled in the UK. “I was very lucky. If this happened in 90 per cent of other countries I probably wouldn’t have had the chance to even get out of the police station, I’d be stuck. Thankfully it wasn’t Russia or the Middle East, places where you don’t get another chance.”

He is now calling for a judicial review into his arrest, claiming the SFO had no reason to suspect he wouldn’t have cooperated with the investigation. Moreover, he says the raid was illegal as the warrant was for a holding company he owns based a few blocks down the road. If the review is granted (and subsequently upheld), the SFO will have to return all of the documents it seized, making any later charges far more difficult.

Assuming this does go away, it would only leave the small matter of his £1bn civil case against Kaupthing and its administrators. Although far less entwined with the bank than his brother Robbie – who infamously appeared in a glossy Kaupthing magazine – Vincent was still massively exposed. He says he was defrauded by Kaupthing, claiming it misrepresented its perilous financial state. “They were performing share support, meaning they didn’t have any equity, meaning they shouldn’t have been a bank. They withheld information from everybody. It just didn’t occur to me that a bank could go bust.”

He says the administrators subsequently destroyed the value of his property business, which he maintains was still viable. “Administrators are driven by trying to liquidate a structure and they are driven by the legal bills they create,” he says. “If they had been patient and let us go to market, they would have got their money. Instead they decided the best course of action was no action. Stand still.”

I ask if the impact of his arrest could lead him to start afresh abroad. “I don’t know what will happen after. I might consider it. For now we are still here. We will stay here until we finish the investigation.”

The day after his arrest, Vincent had planned a party on his yacht, which went on in his absence. I wonder if he was angry he missed it. His answer is typical Vincent: “There will be more parties… This isn’t over yet, there is a long way to go. It’s interesting.”

First published in City A.M.