Robert Tchenguiz

Robert Tchenguiz (born 9 September 1960) is a British entrepreneur, property investor, activist shareholder and securities dealer. The younger brother of Vincent Tchenguiz, he undertook a series of corporate deals, focusing particularly on property assets associated with UK pub and supermarket chains, during the 2000s. However, the value of some of his investments plunged during the financial crisis of 2007–08, exacerbated by the collapse of his major financial backer, Iceland's Kaupthing Bank. He and his brother's businesses were also the target of a misdirected UK Serious Fraud Office enquiry and of various law suits.

Robert Tchenguiz
Born
Robert Khadouri

(1960-09-09) 9 September 1960
Tehran, Iran
CitizenshipBritish
OccupationProperty developer
Net worth£850 million (with brother)[1]
TitleCo-chairman, Rotch Property Group
Spouse(s)Heather Bird
Children2
Parent(s)Violet Khadouri
Victor Khadouri
RelativesVincent Tchenguiz (brother)
Lisa Tchenguiz (sister)

Early life

Tchenguiz was born in Tehran, Iran, to an Iraqi-Jewish family,[2] the son of Victor and Violet Khadouri.[3] His family left Iraq in 1948 and settled in Iran, where his father, a jeweler, worked for the Shah and ran the country's mint.[3] He also changed the family surname from Khadouri to Tchenguiz.

In 1979 the family moved in England after the Iranian revolution.[3] He has one brother, Vincent Tchenguiz, and one sister, Lisa Tchenguiz (formerly married to BBC Radio 1 disc jockey, Gary Davies[4] and then to South African-born Del Monte CEO, Vivian Imerman).

Career

Starting with an investment in a Hammersmith office block, the Tchenguiz family established Rotch Property Group, a highly leveraged business that "typically buys properties let long-term to blue-chip clients" and "relies on property values rising in a low-interest-rate environment".[5] In a booming real estate market, they also applied an American financial engineering strategy of securitization: borrowing large sums against future cashflows from company assets, enabling them to access more debt, and on better terms (and much of it - reportedly over £2 billion - from Iceland's Kaupthing Bank), than had been thought possible.[6] Other businesses included the R20 investment vehicle and investment company London & Boston.[7]

High street and pub chain investments

In 2001, the Tchenguiz brothers and Vivian Imerman, supported by a £190 million loan from German investment bank WestLB, backed a 2001 management buyout of distiller Whyte & Mackay (in 2005 they bought remaining interests in the firm before selling the company to India-based United Spirits Limited for £595m in 2007).[8][9][10] Also in 2001, Robert Tchenguiz tabled a £310m bid for Shell Mex House, a 1930s Art Deco building overlooking the Thames next to London's Savoy Hotel,[5] and in 2003 bid to buy London's Selfridges[11] but later (July 2003) withdrew his offer[12] before launching bids to buy the Pubmaster pub chain and the Odeon cinema chain.[13] After selling his Pubmaster stake to Punch Taverns, in 2004 he established the Globe Pub Company and acquired 364 pubs from Spirit Group, in a deal worth £345m,[14] and also bought the Laurel Pub Company for £150m. In 2005 he bought the Yates's high street bar group for £200m[15] and then spent £80m for 98 pubs from the SFI Group, which operated the Slug and Lettuce chain.[16] Also in 2005, he was part of a consortium targeting the Somerfield supermarket chain.[17]

In 2006, he led a consortium targeting the Mitchells & Butlers pub chain,[18] and while the initial bid was rebuffed, Tchenguiz continued to pursue M&B in 2007[19] only for M&B management to postpone a proposed property joint venture due to a credit crunch heralding the financial crisis of 2007–08.[20] Deteriorating market conditions saw £225m wiped off the value of Tchenguiz's investments in a single day in November 2007,[21] and by January 2008, collapsed corporate deals and plunging stock market values were reported to have cut the paper value of three Tchenguiz investments (M&B, supermarket chain Sainsbury's and computer games publisher SCi Entertainment) by over £560m in less than 12 weeks.[22] In March 2008, Tchenguiz's Laurel Pub Company collapsed into administration, but around 239 of pubs and restaurants were immediately acquired from the administrators in a deal financed by between £50m and £60m of credit provided by Tchenguiz.[23] He continued to build his stake in M&B in May 2008, but was reportedly sitting on a hefty loss as M&B shares, once trading at nearly 900p, had fallen to 344p.[24] In May 2008, Tchenguiz - holding 27% of the company's shares - got M&B agreement to place property interests into a tax-efficient real estate investment trust once credit market conditions were favourable for refinancing.[25]

Financial losses

However, by October 2008, under pressure from Kaupthing Bank, which had backed many of Tchenguiz's investments, he was forced to sell off holdings in M&B, Sainsbury's, SCi Entertainment and other businesses, incurring substantial losses estimated at over £800m.[26] And in February 2009, Kaupthing announced it was suing Oscatello Investments, a British Virgin Islands-based holding company controlled by Tchenguiz, in relation to an unpaid overdraft of £643m.[27] In May 2009, Kaupthing followed up with a £180m claim against Tchenguiz for proceeds from the sale of Somerfield[28] - eventually settled in June 2010 with the Tchenguiz Discretionary Trust surrendering control of £137m to Kaupthing's administrators.[29] Meanwhile, in April 2009, Tchenguiz's Globe Pub Company faced administration after defaulting on a loan payment;[30] the chain's 421 outlets were bought from the receivers by Heineken in October 2009.[31]

In the wake of the collapse of Kaupthing Bank, Robert Tchenguiz was suspected of fraudulent dealings and was arrested in a dawn raid in 2011; however, the investigation ended in 2012 with the Serious Fraud Office (SFO) citing "insufficient evidence", and no indictment was ever brought.[32] In fact, Tchenguiz lost millions of pounds in Kaupthing's collapse.[32] Robert Tchenguiz sued the Serious Fraud Office (SFO) for false imprisonment and damages to his businesses.[33] Due to mishandling of the inquiry, the court had already ordered the SFO to pay 80% of Robert Tchenguiz's legal expenses in the matter.[34] In 2014 the SFO settled with Tchenguiz for a sum of £1.5m.[35]

However, Tchenguiz also took legal action against Grant Thornton and partners at the firm who he claimed had misled the SFO into investigating him and brother Vincent,[36] though the dispute reportedly also created a rift between the brothers due to a legal row over administration of the Tchenguiz Family Trust; main beneficiary Vincent was accused by Robert of making false representations "of a serious nature" about him to Grant Thornton.[37] The court action was eventually discontinued by Robert Tchenguiz in October 2018.[38] The judge said all defendants could leave the court "with their reputation completely intact" as Tchenguiz's allegations had "completely failed"; while the court could not compel Tchenguiz to apologise, "it records unequivocally that it is warranted." However, Tchenguiz said "I am definitely not providing an apology."[39]

Tchenguiz's home, the former Royal College of Organists building.

A legal dispute relating to Investec Trust Guernsey's handling of the Tchenguiz Discretionary Trust ended in an April 2018 judgement in favour of the Guernsey-based business, with Tchenguiz threatened with loss of his Kensington home, formerly housing the Royal College of Organists, as a result[40] - though this threat was later reported to have been resolved.[39]

In July 2018, Robert Tchenguiz was said by a High Court judge to have lied regarding a €2bn Santander Bank deal in a dispute involving Edgeworth Capital, a Tchenguiz-owned Luxembourg-registered company, and Aabar Investments, an Abu Dhabi investment business.[41] Finding in favour of Aabar, the judge said Tchenguiz was "prepared to say whatever he thought would assist Edgeworth's case, without any regard for its truth."[42]

Resumption of activist shareholder activities

In September 2019, Tchenguiz sold one of his properties, the Quarry House office building in Leeds, to Legal & General for £246m, part of an effort to raise funds to invest in new UK properties.[43]

During 2019, Tchenguiz built up a substantial shareholding in bus and rail company FirstGroup, and in November 2019 pushed for the group to be broken up.[44] In December 2019, FirstGroup announced it was considering a sale of its north American businesses, leading Tchenguiz, holding 4.7% of the company, to claim a shareholders victory.[45] However, following the March 2020 stock market crash due to the COVID-19 pandemic, Tchnenguiz's £28m stake in the group was sold. It was later reported that his investment had been funded by loans from City brokers including Intertrader, IG Group and CMC Markets, who called in the loans then sold the shares after Tchenguiz did not repay the loans; at least one of the brokers was said to be pursuing legal action for repayment.

Also in November 2019, Tchenguiz campaigned to restructure AIM-listed real estate lender Urban Exposure in which his company, R20 Advisory, had built a 12.6% stake.[46] In March 2020, under pressure from Tchenguiz, Urban Exposure was set to break itself up and sell its constituent parts.[47]

In May 2020, Tchenguiz submitted plans to Westminster City Council to convert the former headquarters of MI5 (Leconfield House in Curzon Street, Mayfair) into a 65-bedroom private members' hotel. Tchenguiz had bought the building for his Rotch property business in 2004 for about £140 million.[48]

Personal life

Tchenguiz once dated supermodel Caprice Bourret and was close to Diana, Princess of Wales.[5]

In 2005, he married his longtime girlfriend, American Heather Bird; they have two children. Though separated, they live in different parts of the same house by the Royal Albert Hall in Kensington, London. His girlfriend, Julia Dybowska, also lives in the house. Details about his domestic arrangements were aired in a May 2018 BBC documentary The Rise and Fall of the Playboy Billionaire, prompting Tchenguiz to threaten legal action against the BBC,[36] and to appoint former Bell Pottinger CEO James Henderson as his PR advisor.[49]

In January 2018, Robert Tchenguiz was reported to have been on the invitation list to a controversial Presidents Club dinner in London.[50]

References
  1. "Vincent and Robert Tchenguiz". The Times. London. Archived from the original on 5 May 2009.
  2. Mira Bar-Hillel (September 26, 2012). "The Brothers". The London Magazine. Retrieved 6 October 2013.
  3. The Daily Telegraph: "Lisa Tchenguiz and Vivian Imerman: profiles" January 22, 2010
  4. The Daily Telegraph: "Just like Diana, I had three people in my marriage" By Bryony Gordon March 6, 2013
  5. Mathiason, Nick (29 April 2001). "Socialite battles Saudis for Shell building". Observer. Retrieved 2 January 2020.
  6. Bowers, Simon (14 February 2011). "How Kaupthing's dance of debt with Tchenguiz brothers ended in £2bn ruin". Guardian. Retrieved 2 January 2020.
  7. Hunter Gordon, Kim (9 October 2005). "Property magnates in £20m flotation". Observer. Retrieved 2 January 2020.
  8. ES Magazine: The grapes of wrath" by Mark Hollingsworth
  9. Herald Scotland: "Imerman eyes a bid for Whyte & Mackay" by Greig Cameron 30 November 2013
  10. The Independent: "Vivian Imerman eyes Whyte & Mackay acquisition as Diageo agrees to sell over competition concerns" by Simon Neville 29 November 2013
  11. Mathiason, Nick (18 May 2003). "Iranian tycoon to table £620m bid for Selfridges". Observer. Retrieved 2 January 2020.
  12. Lawson, Annie (5 July 2003). "Weston wins battle for control of Selfridges". Guardian. Retrieved 2 January 2020.
  13. Mathiason, Nick (6 June 2004). "Tycoon stars in an Odeon drama". Observer. Retrieved 2 January 2020.
  14. Wright, George (8 December 2004). "Tchenguiz forks out £345m for pubs". Guardian. Retrieved 2 January 2020.
  15. Bowers, Simon (5 May 2005). "Tchenguiz still thirsty after buying Yates's bars". Guardian. Retrieved 2 January 2020.
  16. Marriner, Cosima (25 June 2005). "Fears for jobs at Slug and Lettuce chain". Guardian. Retrieved 2 January 2020.
  17. Hunter Gordon, Kim (4 September 2005). "Tchenguiz poised to win bid battle for Somerfield". Observer. Retrieved 2 January 2020.
  18. Bowers, Simon (14 March 2006). "Tycoon assembling bid for Mitchells & Butlers". Guardian. Retrieved 2 January 2020.
  19. Wachman, Robert (8 July 2007). "Tchenguiz puts Mitchells in a spin". Observer. Retrieved 2 January 2020.
  20. Fletcher, Nick (2 August 2007). "Credit woes bring hangover for pubs". Guardian. Retrieved 2 January 2020.
  21. Bowers, Simon (6 November 2007). "Fleeing investors lose Tchenguiz £225m in one day". Guardian. Retrieved 2 January 2020.
  22. Bowers, Simon (24 January 2008). "Meet Robert Tchenguiz: he's lost £560m and counting. But he says the yacht is safe". Guardian. Retrieved 2 January 2020.
  23. Bowers, Simon (28 March 2008). "Slug and Lettuce pubs group collapses after failure to find buyer". Guardian. Retrieved 2 January 2020.
  24. Fletcher, Nick (9 May 2008). "Tchenguiz tops up his holding in Mitchells & Butlers". Guardian. Retrieved 2 January 2020.
  25. Bowers, Simon (21 May 2008). "Tchenguiz persuades M&B to do the Reit thing". Guardian. Retrieved 2 January 2020.
  26. Bowers, Simon (9 October 2008). "Billionaire Tchenguiz takes £800m hit with forced sale of investments". Guardian. Retrieved 2 January 2020.
  27. Bowers, Simon (7 February 2009). "Kaupthing sues Tchenguiz firm for £643m". Guardian. Retrieved 2 January 2020.
  28. Bowers, Simon (17 May 2009). "Tchenguiz trust hit with £180m lawsuit". Guardian. Retrieved 2 January 2020.
  29. Bowers, Simon (23 June 2010). "Tchenguiz trust agrees to hand over frozen Somerfield cash". Guardian. Retrieved 2 January 2020.
  30. Yuk, Pan Kwan (6 April 2009). "Tchenguiz pub group defaults on loan". Financial Times. Retrieved 2 January 2020.
  31. Wilson, Amy (29 October 2009). "Heineken buys Robert Tchenguiz pubs from receivers". Telegraph. Retrieved 2 January 2020.
  32. Russell, Jonathan (15 October 2012). "SFO drops multi-million investigation into Robert Tchenguiz". The Daily Telegraph.
  33. "Tchenguiz brothers seek millions from Serious Fraud Office". The Guardian. 3 December 2012.
  34. Lipman, Jennifer (15 November 2012). "New blow to Serious Fraud Office as agency told to pay Tchenguiz legal costs". The Jewish Chronicle. London.
  35. Rankin, Jennifer (31 July 2014). "Tycoon Robert Tchenguiz gets £1.5m as SFO seeks end to Iceland banks inquiry". Guardian. Retrieved 7 January 2020.
  36. Armitage, Jim (22 May 2018). "Tycoon Robert Tchenguiz set to sue BBC for 'playboy' documentary". Evening Standard. Retrieved 2 January 2020.
  37. Hipwell, Deirdre (17 May 2018). "Legal row splits Tchenguiz brothers". Times. Retrieved 6 January 2020.
  38. Thompson, Barney (15 October 2018). "Robert Tchenguiz drops Grant Thornton lawsuit". Financial Times. Retrieved 2 January 2020.
  39. Thompson, Barney (17 October 2018). "Robert Tchenguiz promises to rebound after dropping legal battle". Financial Times. Retrieved 6 January 2020.
  40. Hipwell, Dierdre (24 April 2018). "Bank crash tycoon Robert Tchenguiz may be thrown out of £20m mansion". Times. Retrieved 2 January 2020.
  41. Hipwell, Deirdre (9 July 2018). "Robert Tchenguiz 'lied' over €2bn Santander bank deal". Times. Retrieved 6 January 2020.
  42. "Edgeworth Capital (Luxembourg) S.À.R.L. v Aabar Investments PJ". One Essex Court. Retrieved 6 January 2020.
  43. Hempshell, Mark (24 September 2019). "Tchenguiz Sells Leeds Investment To Help 'Recreate Empire'". DealMakerz. Retrieved 6 January 2020.
  44. Lea, Robert (19 November 2019). "Robert Tchenguiz pushes for break-up of First Group". Times. Retrieved 6 January 2020.
  45. Mitchell, Archie (16 December 2019). "First Group shareholder claims victory as firm weighs sale of US arm". City AM. Retrieved 6 January 2020.
  46. Evans, Judith (5 November 2019). "Robert Tchenguiz returns to shareholder activism". Financial Times. Retrieved 6 January 2020.
  47. Kleinman, Mark (3 March 2020). "Urban Exposure plots break-up after Tchenguiz pressure". Sky News. Retrieved 26 March 2020.
  48. Prynn, Jonathan (11 May 2020). "MI5's former headquarters in Mayfair to be high-end hotel". Evening Standard. Retrieved 21 May 2020.
  49. Kelly, Liam (8 July 2018). "Fallen spinner out of the frying pan". Times. Retrieved 2 January 2020.
  50. Hyde, Marina (25 January 2018). "Britain's ghastliest financial sublebrities – a who's who". Guardian. Retrieved 2 January 2020.
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