Icelandic exposure chills the Tchenguiz

Vincent Tchenguiz is battling to take back his property empire from the ashes of Kaupthing. James Moore reports

In their heyday they were corporate raiders par excellence. Wherever there was trouble brewing – usually if property were involved – it seemed that up would pop one or the other (or both) of the Tchenguiz brothers with a plan. To add to their impressive fortunes.

Sainsbury's, the retailer, Mitchells & Butlers, the pub company, La Tasca, all were among companies in receipt of their attentions.

And, to be fair, it is not as if they can't boast of some notable wins (Robert, for example, cashed in a big stake in Somerfield when the retailer was taken over by the Co-operative group) together with playboy lifestyles, although Robert, younger, smoother, and with a fondness for snappy dressing, has slowed down since his marriage.

They also have all the obligatory toys of the super wealthy, the yachts, the multiple mansions, the flash cars and (in the case of Vincent, the older of the pair) the photographs of him surrounded by bevies of beautiful women. They have rarely been out of the spotlight.

But they never quite had it all their own way – the Sainsbury family, for example, scuppered an attempt to force a takeover of J Sainsbury, the eponymous supermarket group in which they still have a considerable interest, if not control, leaving Robert Tchenguiz nursing a huge loss when he eventually sold the massive stake he had built up via contracts for difference. And the reason he had to sell was Kaupthing.

The collapse of the Icelandic bank, which had been closely associated with the brothers, providing finance for many of their ventures, created an earthquake from which after-shocks are still periodically rumbling. One that is causing ructions through the courts at the moment is where the brothers stand as creditors and what chance they have of securing some – or even all – of the hundreds of millions of pounds in assets held by the bank as collateral against loans that were seized when the roof fell in.

Getting a handle on the business interests of people like the Tchenguiz brothers is never easy. They tend to operate through webs of interconnected companies, registered in a variety of jurisdictions (although for the purposes of tax efficiency).

There are two trusts with claims against Kaupthing: The Tchenguiz Discretionary Trust (read Robert) and the Tchenguiz Family Trust (read Vincent). The really interesting case at the moment involves the Family Trust, which is currently waiting on a decision which could yet see a revival in Vincent's fortunes.

Currently, a variety of lending banks exercise financial control in the shares of a large real estate portfolio owned by the Tchenguiz Family Trust. They had been placed with Kaupthing as collateral in an attempt to prevent the bank calling in a £1.8bn loan to Robert. The manoeuvre ultimately proved to be in vain because the loan was finally called in when the bank collapsed in October 2008. As was the collateral.

The upshot of all this is that a substantial part of Vincent's multibillion pound property empire is no longer under his control. He is still managing it, but he can't do anything much with it. The same is true of his ownership of the controversial property management company Peverel. Last night it issued a statement saying: "The Peverel Group are owned by the Tchenguiz Family Trust." Which is still true in one sense.

However, it is understood that the ultimate financial control of the stake is in the hands of Vincent Tchenguiz's lending banks.

Does this mean the end of Vincent Tchenguiz as a force in the City, then? Well, don't expect to see either brother's name popping up on share registers, or (more typically) being declared as having an interest in company X through contracts for difference for now.

But the trouble for Kaupthing creditors is this: the value of the shares its liquidators would like to get their hands on come with a sting in the tail. If control changes, default clauses are triggered and the whole thing gets even more murky.

The court's decision is expected within the next few days on what happens to the collateral, which clients of the Peverel Group might welcome – at least they would know who they are aiming their guns at. There is an action group set up by leasehold clients of the company who have levelled a string of criticisms about its business practices.

Peverel maintained in a statement that "as a market leader, we often bear the brunt of criticism for things that not only affect the whole property management industry, but are beyond our control" and "like many organisations, The Peverel Group receives comments, complaints and queries via online websites, forums and blogs." What is certainly clear is that whatever decision the court makes, the Tchenguiz name is unlikely to remain in the shadows for too long.

The rise and rise of the Tchenguiz family

* The rise of the Tchenguiz brothers to London's financial elite is quite a story. The family grew up in Iran, where their father Victor, an Iraqi jew, had fled to escape persecution in 1948.

The three Tchenguiz children, Vincent, Robert and younger sister Lisa, attended the American school in the Iranian capital Iran, where their passion for making money was first made manifest.

Vincent arrived in London in 1984, joining Prudential Bache, where he traded futures for the firm. At the same time Robert, four years his junior, was building a property empire in the city with the encouragement of their father. Vincent eventually packed in his day job to join his brother and their company, Rotch, bought an astonishing £4bn of property, largely through debt financing, becoming one of the most aggressive buyers in town. While the company was wound down as the brothers pursued divergent interests, they still have strong business links and talk most days. Meanwhile their sister, Lisa, married Vivian Imerman, the food and drinks magnate. The marriage was ultimately to prove a failure and resulted in one of the most spectacular divorce battles seen in London as she fought for a greater share of his wealth than had been originally specified in a pre-nuptial agreement (his fortune had increased substantially during the years of their marriage).

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales Executive - OTE £25,000

£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...

Ashdown Group: Graduate Developer (Trainee) - City, London

£25000 per annum + benefits: Ashdown Group: A large financial services company...

Ashdown Group: Marketing Assistant - Financial Services Sector - London

£20400 per annum: Ashdown Group: An established and highly reputable organisat...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future