Property mogul Robert Tchenguiz today dropped his multi-million pound claim against Grant Thornton in a move described by the accountancy firm as "total capitulation".
The flamboyant millionaire was due to give evidence at court today in a trial in which he accused the accountancy firm, two of its partners and former Kaupthing lawyer Johannes Runar Johannsson of conspiring to encourage the Serious Fraud Office (SFO) to launch an investigation into him as part of its wider probe into the collapse of the Icelandic bank's collapse in 2008.
The Tchenguiz brothers were arrested by the City of London Police in 2011 but the SFO dropped its investigation a year later because of insufficient evidence. In 2014 the pair were paid £4.5m in damages by the SFO and received an apology from its then director David Green, who admitted that serious mistakes were made.
Robert Tchenguiz said he had "reached a commercial settlement with Kaupthing, the result of which has enabled me today to withdraw the case which was being heard in London’s Commercial Court, and other proceedings in the BVI (British Virgin Islands)."
However, a spokesperson for Grant Thornton said: “The claimants’ withdrawal of all of their allegations, just as Mr Tchenguiz was about to give evidence, is a total capitulation and fully vindicates the position that we and the other defendants have maintained throughout this litigation. These claims should never have been brought.
“The claimants will be paying all of our legal costs on an indemnity basis, which will be many millions of pounds. For the avoidance of doubt, no deal or settlement has been made between any of Grant Thornton UK LLP, Steve Akers or Hossein Hamedani with Robert Tchenguiz or his trusts. The case against all of the defendants has simply collapsed.
“We have always maintained that the allegations against these experienced and well-respected professionals were abusive. They emerge from these disgraceful proceedings with their reputations restored."
Tchenguiz's statement argued: "The proceedings against Grant Thornton, Johannes Johannsson and the BVI Companies were pleaded by eminent leading counsel, and I and my trustees were at all times represented by major law firms in London. In circumstances where the claim has been withdrawn as a result of a commercial settlement with an interested party, it would be wrong to suggest that it was an abuse to have brought them in the first instance.”
The colourful property magnate, who shares a £20m mansion in Kensington with his 27-year old Polish girlfriend, his ex-wife and their two children, expressed relief "that the long legal saga which has dominated my life for years is almost over."
He added: "I am finally able to get on with my life and rebuild my business interests."
A source close to Tchenguiz told City A.M. that as part of the settlement he would be able to keep the mansion. It was reported earlier this year that it could have been seized following a legal dispute in Guernsey.
Meanwhile Johannsson said in a statement: "It was obvious to me from the outset that the claims brought against me by Robert and Vincent Tchenguiz were nothing more than devices for them to achieve leverage in their commercial negotiations with Kaupthing...The claims had no foundation, should never have been brought and I am pleased that, after years of litigation, I am now entirely vindicated."