Tchenguiz brothers arrested in Icelandic bank swoop

(Update) Police have arrested Vincent and Robert Tchenguiz, the property entrepreneurs, as part of an investigation into the collapse of Icelandic bank Kaupthing.

The Serious Fraud Office announced today that seven men in London and two in Reykjavik had been held in connection with the probe, in operations by UK police and Icelandic investigators.

Kaupthing was the last of Iceland's top three banks taken over as the island's indebted economy collapsed in the financial crisis in 2008.

Robert Tchenguiz (pictured) borrowed from Kaupthing to buy a variety of assets in Britain, including stakes in Sainsbury's and Somerfield. He took out a £1.8 billion loan from the bank in the months before it failed.

According to the SFO, law enforcement officials in London searched two business properties and eight residential addresses.

During the course of the operation, which involved 135 officers and SFO investigators, seven men were arrested and taken to police stations in central London for interview. The SFO added that the arrested suspects’ ages ranged from 42 to 54.

Investigators from the Iceland's Special Prosecutor’s Office are currently in Britain, although not engaged on the search, according to the SFO.

The Tchenguiz brothers released a joint statement confirming their arrest and pointing out that they were confident of being ‘cleared of any allegation of wrong-doing.’

‘We were arrested earlier this morning and are being questioned with regard to matters relating to our relationship with Kaupthing Bank,’ they said. ‘Both of us are co-operating fully with the investigation and are confident that, once concluded, we will be cleared of any allegation of wrongdoing.’