Vincent TchenguizProperty magnate Vincent Tchenguiz has said it is a "huge relief" that he is no longer being treated as a suspect in a fraud investigation into a failed Icelandic bank.

Mr Tchenguiz was arrested and questioned in March last year in a raid on his London headquarters as part of a Serious Fraud Office (SFO) inquiry into the collapse of Kaupthing bank, one of three Icelandic banks to collapse during the 2008 credit crunch.

But the SFO confirmed Mr Tchenguiz had been informed by its new director David Green that he is no longer a suspect and his bail will be cancelled. However, his younger brother Robert, who was arrested at the same time, is still a suspect.

Both Tchenguiz brothers denied any wrongdoing following their arrest 15 months ago.

Mr Tchenguiz, 55, said: "It is a huge relief that, under the new director of the SFO, this shadow has now been lifted and I can get on with rebuilding my life and my business interests. The damage, however, has still to be accounted for."

The Tchenguiz brothers last month challenged the lawfulness of the SFO's decisions at a judicial review hearing in London, accusing the financial crime fighter of "institutional failure".

Lord Goldsmith QC, representing Vincent Tchenguiz, told judges Sir John Thomas and Mr Justice Silber last month that the SFO made "false" and "misconceived" allegations.

In written submissions, Lord Goldsmith, a former attorney general, said: "A failure on the part of an investigating authority to pick up on every detail during the course of a major investigation is not necessarily evidence of negligence or dereliction of duty. But the nature and extent of the SFO's admitted errors in the present case are of a different order. In Vincent Tchenguiz's submission they point to collective institutional failure."

The SFO announced an investigation into suspected fraud in December 2009 surrounding UK investment at Kaupthing, which it said at the time would "seek to identify whether misrepresentations or false representations were communicated by the bank in the push to attract UK investors".

Kaupthing had a significant operation in the UK and its collapse left a string of creditors owed money, with many local authorities and charities among those that lost money.