The brothers were the highest profile names involved as 135 Serious Fraud Office and City of London Police officers launched raids in London and Reykjavic.

The operations relate to the SFO’s ongoing investigation into the circumstances surrounding the collapse of the Kaupthing banking Group.

In London two business properties and eight  residential addresses were searched.

During the course of the London operation seven men were arrested and taken to Police Stations in Central London for interview.  The arrested suspects’ ages ranged from 42 to 54.

Investigators from the Icelandic Special Prosecutor’s Office are currently in the UK though are not engaged on the search.

The London operation involved 135 police officers and SFO Investigators.

In Reykjavik, coordinated with the London searches, two residential properties were searched and two males aged 42 and 43 and were arrested and interviewed.

This operation was undertaken at the request of the SFO and is being effected by the Special Prosecutor’s Office, with SFO investigators in attendance.

In a joint statement Robert and Vincent Tchenguiz said: “We were arrested earlier this morning and are being questioned with regard to matters relating to our relationship with Kaupthing Bank.

“Both of us are cooperating fully with the investigation and are confident that, once concluded, we will be cleared of any allegation of wrongdoing.”