British property tycoon Robert Tchenguiz has abandoned a multi-million pound lawsuit against accountancy firm Grant Thornton just hours before he was due to give evidence in court.
The Iranian-born entrepreneur had accused Grant Thornton, two of its partners and a former Kaupthing lawyer Johannes Runar Johannsson of spreading misinformation in order to launch a Serious Fraud Office (SFO) investigation into him.
Mr Tchenguiz and his brother Vincent were arrested in 2011 as part of an SFO probe into the collapse of Icelandic bank Kaupthing in 2008, which had allowed the property magnate to borrow £1.6 billion before going bust.
The investigation was dropped in 2012 and the Tchenguiz brothers won an apology and received £4.5 million in damages from the SFO because of “serious mistakes” in the probe.
The property developer, known for his flamboyant lifestyle, 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)”.
Reacting to the news, Grant Thornton, the major City of London firm, said Mr Tchenguiz would be paying all of their legal costs, which would be millions of pounds.
“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,” a spokesperson for Grant Thornton said in a statement.
The statement added: “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.”
Mr Tchenguiz who has a £20 million home in Kensington, London, was once, along with his brother, one of the richest men in Britain, reputed to be worth £850 million in 2007.
Legal woes erupting from the financial crisis of 2008 led to speculation that he could be about to lose his mansion, which he shares with his girlfriend, ex-wife and two children.
However, reports on Tuesday said Mr Tchenguiz had been able to keep his large home as part of a settlement. It had been suggested the property was about to be seized as part of a legal dispute in Guernsey.
In a statement, he said he was glad “that the long legal saga which has dominated my life for years is almost over".
"I am finally able to get on with my life and rebuild my business interests," he added.