Tchenguiz vs Grant Thornton | FT Alphaville

Tchenguiz vs Grant Thornton

Is Vincent Tchenguiz the greatest legal mind of his generation? Almost certainly not. But his determination, evocative of a children’s game show contestant, is formidable.

Indeed, since being wrongfully collared by the SFO in early 2011 as part of their investigation into Kaupthing, the failed Icelandic bank, Tchenguiz has treated the hallowed workshop of British justice as his private version of Fun House, the 90s after-school TV hit that reflected a generation’s E-number giddiness. In the place of mulleted perma-enthusiast Pat Sharpe, a team of luxuriantly wigged QCs have watched Tchenguiz charge gleefully through the courts, snatching up legal goodies.

So far, he has done rather well. The SFO have conceded he was, albeit under the chaotic ministries of its former administration, maligned. Moreover, the fraud agency acknowledges the case for substantial damages against its own name. Tchenguiz wants £200m; they want to give him a lot less. However, his latest legal melee suggests the property tycoon is no longer satisfied with a few small prizes – like all the grittiest contestants, he wants the lot.

In a series of letters, filed to court and seen by the FT, Tchenguiz accuses Grant Thornton, the accountancy firm upon whose information the SFO relied heavily in building their botched case, of widespread impropriety. His central contention is the Grant Thornton, which is receiver to Kaupthing, prolonged the investigation, acting across many fronts to complicate and obfuscate in order to extend the period in which it could generate fees. Grant Thornton has denied this.

Here are some of the juicier excerpts:

Grant Thorton appears to have put its interests in earning fees and generating profits above all other professional, ethical and legal considerations…

Grant Thornton (and in particular its partners, Steve Akers and Hossein Hamedani) has been central to everything which has gone wrong since the collapse of Kaupthing [the Icelandic bank which Tchenguiz and his brother were accused of helping to destroy]. Its conduct has repeatedly crossed the line from proper ethical practice into areas of ethical, civil and potentially criminal wrongdoing…

It is plain that many of the factually inaccurate criminal allegations made against Vincent Tchenguiz by the SFO in the Information and by the City of London Police in related documents must have emanated from GT…

In short, Grant Thornton has acted without acceptable internal ethical or professional controls across its all-encompassing role in the collapsed bank. It continues to participate on the [resolution committee and wind up committee] at the top of the bank, it advised the ResCom, it controlled Kaupthing’s electronic disclosure information and the way in which this was made available to regulatory authorities, its members were appointed as receivers and liquidators of companies which provided security to Kaupthing, it actively participated in litigation on behalf of a number of entities giving a different version of the ‘truth’ as suited each case, it encouraged and ultimately misled the SFO into starting a criminal investigation and then did nothing as it watched false information being put before the courts and, ultimately, seeing that investigation collapse, it even took steps to undermine the integrity and value of Kaupthing’s security in the interests of obtaining future liquidation instructions, against the interests of Kaupthing’s creditors…

Ouch!

If you fancy a bit of legal rubbernecking, you can view the actual letters here. Click the images:

This alleged naughtiness has, by his own back-of-a-super yacht estimate, cost Tchenguiz £2.5bn – enough for the tennis racquet, the in-line skates and the Butlins weekend Red Pass. He wants Grant Thornton in court to have it out.

At this point, it is important to remember that the SFO has gone to great, self-lacerating lengths to shoulder the blame for all that went wrong with the Tchenguiz investigation. The agency has maintained throughout that it was the enduring credulity of its own staff, and not the iniquitous behaviour of a third party, which led to the arrests.

For its part, Grant Thornton responded to questions from the FT about the letters with the following statement:

Regarding your queries more generally about the allegations made, Grant Thornton has acted appropriately, and in accordance with its professional responsibilities and legal obligations throughout, and any disclosure has been made accordingly. It is the responsibility of the investigating agency to review and interpret any information provided to it, and to act as it sees fit. Grant Thornton did not act as advisor to the Serious Fraud Office. We cannot comment further due to our confidentiality obligations. The fact that we are unable to provide any comment, or respond to any specifics, should not be taken to mean that we accept any allegations that may have been made.

It is unlikely any of this scrap will reach court soon, if at all. Tchenguiz is tied up fighting the SFO. The SFO is tied up fighting itself. And, so far, Grant Thornton has resisted all efforts to involve it in either fight. That might be about to change, however: a judgement last week ruled that the accountant’s staff must hand to court documents it shared with the SFO.

Hardly the jackpot, but enough to keep the Tchenguiz enthusiasm simmering.

Grant Thornton has not been a party in either the judicial review into the Tchenguizs’ arrests or the subsequent damages hearing. Last week, its employees threatened legal action against the SFO if the agency continued to use internal reports that it had viewed at the offices of the accountants.