uti.is 22 May 12: SFO and the Tchenguiz brothers

In an FT front page article today, the story is of an SFO lawyer who in a report warned the SFO not to pursue a case against the Tchenguiz brothers. One of the reasons: “It was an Icelandic bank, with many of the suspects in the case being Icelandic nationals, allegedly committing fraud against Icelandic institutions, taxpayers and authorities,” according to a person who has seen the report.

Correct, Kaupthing was an Icelandic bank – but it had a subsidiary here in the UK, these loans were made here and in Luxembourg, not in Iceland. This happened on the SFO’s turf, with clients based here and most of the money spent here. Surely, a clear case for the SFO to investigate. Otherwise, there wouldn’t be anyone to investigate these matters. Otherwise, the UK is a free-for-all foreign financiers to get involved with UK citizens with good offers.

Most of the cases pursued by the SFO are against some previously unknown crooks who have managed to swindle lots of money. It’s not every day that the SFO lawyers meet someone like Lord Goldsmith in court and high-flyers like the Tchenguiz brothers. This might test SFO’s confidence but it hardly tests the legitimacy of pursuing a case involving a UK subsidiary of a foreign company.

At the heart of the case are loans that not everyone could get and the relationship Kaupthing had with its favoured clients and – in the case of Robert Tchenguiz who sat on the board of Exista – the largest shareholder of the bank.

Link to Sigrun's blog and comments here

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