Regulator admits errors in Tchenguiz probe - report

Property magnate Vincent Tchenguiz arrives at the High Court in London March 16, 2011.

LONDON (Reuters) - The Serious Fraud Office has admitted to "very regrettable errors" in its handling of the investigation of property tycoon Vincent Tchenguiz, the Financial Times reported on Wednesday, clearing Tchenguiz of any potential charges.

Solicitors acting for the SFO apologised to Tchenguiz, in a letter seen by the FT, and accepted responsibility for a botched investigation.

The letter describes how the SFO "inadvertently miscast" information when obtaining search warrants against Tchenguiz as part of an investigation into the collapse of Icelandic bank Kaupthing.

The Serious Fraud Office said its case workers, who were "extremely busy" with a "very large amount of complex information", failed to identify and verify documents in its possession that contradicted the case against Tchenguiz, the FT reported.

The SFO alleged, as part of a wide probe, that Tchenguiz - who was a shareholder in Kaupthing Bank and one of its largest borrowers - had provided Kaupthing with a false valuation for a 1.5 billion pound property portfolio.

Tchenguiz, who has initiated a 100 million pound claim against the SFO for reputational damages, could not be reached for immediate comment.

The SFO could not be reached for immediate comment.

(Reporting by Stephen Mangan; Editing by Leslie Adler)