Property magnate Robert Tchenguiz, whose business empire is ultimately controlled by family trusts registered in the British Virgin Islands and Cayman Islands, has got in trouble over the past six months. He has lost hundreds of millions of pounds on the positions in quoted companies, including supermarket chain J Sainsbury and pubs group Mitchells & Butlers.
The result of recent run of stock market losses was speculation about the financial health of the Iranian tycoon who made £850m fortune from the 1990s property boom. However, Tchenguiz denies all the rumours saying he is a long-term holder, and the companies his family invested in have shown “robust growth om tough trading conditionsâ€. Also, his friends note that while the critics focus on Tchenguiz’s positions in Sainsbury’s and M&B, they ignore his successes.
Actually, it seems quite easy for the hedge funds and traders to spread rumours about his financial position, – as a private entrepreneur, it is impossible for Tchenguiz to assemble an accurate picture of his business empire, which ranges from a stake in supermarket chain Somerfield to a chain of Polish petrol stations.
Tchenguiz is a director of more than 300 UK-registered companies, many of which are used to hold just a single asset. These companies are controlled by BVI- and Cayman Islands-domiciled trusts. The main UK investment vehicle of the entrepreneur, R20 Limited, holds no investments but simply “provides corporate finance and consultancy servicesâ€; it employs 16 people, according to the 2006 accounts. R20 Limited is owned by Balmain Properties Limited, registered in the British Virgin Islands, and the ultimate control of the company belongs to the Tchenguiz Discretionary Trust.
Tchenguiz’s investments in quoted companies are publicly disclosed; when shares in Sainsbury’s fell, it was easy for hedge funds and traders to estimate his losses. Thenguiz insists that he is a long-term holder of Sainsbury’s stock, prepared to wait until the market sees the same intrinsic value that he does.