Vincent Tchenguiz accepts £3m to settle claim against the SFO

Mr Tchenguiz, 57, had initially sought £200m from the SFO after he accused the agency of wrongly causing damage to his reputation and his business

Vincent Tchenguiz, the Iranian-born property magnate, yesterday accepted a £3m settlement and an apology from the Serious Fraud Office after it botched an investigation into his financial affairs.

Mr Tchenguiz, 57, had initially sought £200m from the SFO after he accused the agency of wrongly causing damage to his reputation and his business when he and his brother, Robert, were arrested in March 2011 as part of a criminal inquiry into the collapse of the Icelandic bank Kaupthing.

The SFO was forced to admit in 2012 that it had failed to keep a clear record of the information it used to obtain warrants to search Vincent Tchenguiz’s Mayfair home, leading a High Court to accuse the agency of “sheer incompetence”.

David Green, QC, director of the SFO, said it had agreed to pay Mr Tchenguiz £3m to settle his civil damages claim and make a further £3m initial payment towards his legal fees. Mr Green said: “On behalf of the SFO I apologise to Mr Tchenguiz for what happened to him. The SFO has changed a great deal since March 2011, and I am determined that the mistakes made over three years ago will not be repeated.”

Mr Tchenguiz, who together with his brother built a property empire that at one point owned 1 per cent of all residential property in Britain, said he had decided to accept the settlement – a fraction of what he initially demanded – because he believed the SFO had been influenced by “third parties” pursuing their own commercial interests.

In a statement, he said: “It would not be fair to the SFO or indeed the public purse to bear sole responsibility for the actions of those third parties. Accordingly I have settled my case against the SFO and intend to focus my attentions on those other parties whom I consider are responsible.”

The SFO launched a lengthy investigation into the 2008 collapse of Kaupthing after funds flooded out of the bank in the days before its demise. Mr Tchenguiz borrowed £100m from the bank in 2008 but had always denied any wrongdoing.

The Tchenguiz brothers’ vast property portfolio was once valued at up to £4bn. The economic crisis dented that fortune and they claimed that the SFO’s actions further damaged their businesses.

A separate claim against the SFO brought by Robert Tchenguiz, seeking damages of £100m, continues.