The hunt is on for a missing 17 million shares in Mitchells & Butlers, the pub chain whose troubles have seen its major investor Robert Tchenguiz book a £400 million hit, taking his losses for the week to a staggering £1 billion.

Tchenguiz this week ignominiously exited M&B, which runs some of London's favourite locals as well as the All Bar One chain, selling his 25% stake for a knockdown 130p a share. It was assumed the 105 million shares were snapped up by Bahamas-based billionaire Joe Lewis.

But City sources say Lewis has only taken delivery of 88 million at a cost of £115 million, and is understood to have instructed lawyers to find out where the other 17 million have gone.
It has emerged the Tchenguiz shares were being held by the Icelandic bank Kaupthing as collateral against his crumbling investment empire.

Lewis, who lost £600 million in the collapse of US investment bank Bear Stearns earlier this year, agreed to buy the whole 105 million-share parcel from Kaupthing just as the bank was falling into administration.

Speculation is swirling as to what may have happened to the the other 17 million shares. One theory is Kaupthing could only deliver the 88 million shares as the remainder had been loaned out to an unspecified party.

It is also uncertain whether the shares had been sitting in the Icelandic holding company of the bank — now in administration — or in West End-based Kaupthing Capital Markets, the old Singer & Friedlander which is continuing to operate in London.

A City source said: “It is simply not known at this stage where the shares are, and Joe Lewis is exploring his legal options.”

Tchenguiz is reckoned also to have lost £600 million this week liquidating his 10% stake in Sainsbury's.