Big loss for Tchenguiz as Iceland crisis forces Sainsbury's share sale

Move follows sale of Iranian tycoon's shares in pub group Mitchells & Butlers

The property tycoon Robert Tchen-guiz sold a massive stake in a UK company for the second consecutive day, when his shareholdings were liquidated yesterday.

Mr Tchenguiz sold his 10 per cent stake in Sainsbury's, the grocer, at 250p a share through Kaupthing, the troubled Icelandic bank. A huge sale of the bank's assets was kicked off yesterday. The UK's Financial Services Authority forced Kaupthing's UK banking subsidiary Kaupthing, Singer & Friedlander into administration yesterday.

The sale of Mr Tchenguiz's stake in Sainsbury's followed the sale of the tycoon's 25 per cent stake in Mitchells & Butlers, the pub group, for £137m to the British billionaire Joe Lewis on Tuesday. A market source said: "We understand that he [Tchenguiz] now has no shares or economic interest in Sainsbury's."

In further drama yesterday, Mr Tchenguiz seems poised to sell his 22 per cent stake in SCi Entertainment, the listed holding company of Eidos, the publisher of the Lara Croft Tomb Raider computer games. Aaron Brown, a key lieutenant of Mr Tchenguiz at his investment vehicle R20, stepped down from SCi Entertainment's board yesterday. Shares in SCi Entertainment fell by 15.6 per cent.

The revelations about M&B, Sainsbury's and SCi Entertainment intensified speculation that Mr Tchenguiz's personal fortune may be starting to unravel, although he remains solvent and holds a myriad of other investments.

The firesale of Sainsbury's shares further illustrated that the fallout from the financial turmoil in Iceland could potentially wreak havoc among UK businesses. Many industry observers believe that Baugur, the Icelandic investment group with a controlling stake in large swathes of the UK high street, could be forced into a firesale of its UK assets. Baugur has stressed on numerous occasions over the past week that its UK retail businesses – including the fashion chain Karen Millen, the frozen food retailer Iceland and toy specialist Hamleys – are unaffected by the financial eruptions in Iceland.

The sale price of 250p a share for Mr Tchenguiz's stake in Sainsbury's represents a massive discount on the price the Iranian tycoon paid for the grocer's stock and leaves him nursing losses of hundreds of millions of pounds.

He bought some of the Sainsbury's shares for between 525p and 590p before a potential bid for Sainsbury's by the Qatar Investment Authority, which collapsed in November 2007. Mr Tchenguiz's 10 per cent shareholding in Sainsbury's comprised 7 per cent in ordinary shares and 3 per cent in contracts for difference.

City sources said that investors had over-subscribed by more than two and a half times to snap up Sainsbury's shares at the knockdown rate. Yesterday, Sainsbury's shares fell by 47p, or 15.7 per cent, to 267.75p, although investors were also concerned about a downturn in the grocery sector.

Mitchells & Butlers also confirmed yesterday that Aaron Brown and Tim Smalley, both lieutenants of Mr Tchenguiz at R20, have stepped down as non-executive directors "with immediate effect."

Mr Tchenguiz and his investment company, R20, declined to comment. He has controlling investments in pub groups the Globe Pub Company, Town & City Pub Company and Bay Restaurant Group, but his plans for them are unclear. He is also close to cashing in his lucrative stake in Somerfield, the local grocery chain, which is being acquired by rival grocer the Co-operative Group.

Yesterday, the accountancy firm Ernst & Young was appointed administrators of Kaupthing Singer & Friedlander (KS&F). In a statement, EY said the administration has been necessary because of KS&F's financial position and to protect retail depositors and maintain the stability of the UK financial system. Maggie Mills, a joint administrator at EY, said: "We would like to stress that all retail savers' deposits are properly protected. All retail deposits with Kaupthing which relate to the internet-based Edge accounts have been transferred to ING Direct, a wholly owned subsidiary of ING Group, which operates through its branch in the UK."

The administration capped another tumultuous day for Iceland's crippled financial system. Yesterday, the government cancelled the purchase of a 75 per cent stake in Glitnir Bank and handed the lender over to regulators, after realising it was in bigger trouble than previously thought.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
Sport
David Silva strokes home his and City's second goal
football
Arts and Entertainment
a clockwork orange, stanley kubrick
film
Extras
The Tesco Hudl2: An exceptional Android tablet that's powerful, well-built and outstanding value
indybest

News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricket
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drinkAuthor DBC Pierre presents his guide to the morning after
Life and Style
food + drink
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas