Gamil Naguib, one of two men named in a High Court writ alleging fraud, said he 'very much regretted' his involvement with the charity and claimed two of its officers had been begging him to invest money since 1991.
'They asked me to invest for them,' he said. 'I did not chase them. It has all been a terrible misunderstanding. The charity will get its money back, and some more, as soon as this dispute is resolved. I am 100 per cent innocent.'
Mr Naguib, who has offices in Argentina, Brussels, Cyprus, Washington and Vancouver, was tracked down to an apartment in Antwerp by the Independent after a four-week inquiry. Details of his whereabouts have been passed to the Metropolitan and City Police fraud department.
He and Stuart Ford, another financier acting as an agent for the Salvation Army, were named in a writ filed by the charity at the High Court last month, alleging that they conspired to defraud it of dollars 8.8m. One officer investigating the case said police believed that the lion's share of the money went through Mr Naguib's hands.
Mr Naguib said yesterday that he had been asked by two Salvation Army colonels, a fund-raiser and another senior officer involved in business administration, to buy a letter of credit as an investment. Such letters can be traded at a profit as they near their maturity date.
He said he was forbidden 'under any circumstances' to use the name of the Salvation Army in the deal, which went sour when a Luxembourg finance company accepted payment for the letter of credit but did not deliver it.
'All these accusations (of fraud) have no trace of fact,' he said. 'The money . . . is between two banks and the two banks have all the documents that prove that all the money went from one bank to another. There is a court case taking place. The money is frozen and quite safe.
'It was not done for the Salvation Army; we were not allowed to divulge the name of the Salvation Army under any conditions. I bought the letter of credit on behalf of a company with the consent of the two officers appointed by the Salvation Army. I don't say names.
'It was a bank which was supposed to deliver it . . . it did not come through and, as far as I was told, the money is in the bank.'
Mr Naguib said his relations with the Salvation Army were good. He said he had not been questioned by the British police but he would willingly submit if asked. He said his business associate, Mr Ford, had also behaved properly. Mr Ford has been out of the country since the writ was issued.
Throughout the interview, Mr Naguib refused to name the Luxembourg banks and the finance company involved in the dispute or the precise sum trapped between the two banks.
But he said the Banque Continentale du Luxembourg, which was named on the writ, was not involved. He went on to criticise the behaviour of the finance company.
'They were supposed to cause delivery of the letter of credit and the letter of credit was never delivered and the money remained in one bank,' Mr Naguib said. 'Every cent I have received I will make more, not less.'
Mr Naguib refused to answer questions about the Islamic Pan American Bank, which the Salvation Army alleges was involved in the fraud.
He is general manager of the Buenos Aires-based operation, but police say the bank does not exist.
Investigators rejected Mr Naguib's version of events last night. One said that the writ was issued because of 'incontrovertible evidence' against him. The charity declined to comment.