Serious Fraud Office abandons case and judge instructs jury to return not guilty verdicts
The Serious Fraud Office has abandoned a major corruption trial in which it accused one of Labour's wealthiest party donors of making multimillion-pound payments to win lucrative contracts.
In the latest high-profile setback for the SFO, its counsel told Victor Dahdaleh, the accused, that there was no longer a realistic prospect of a conviction after its main witnesses withdrew evidence or co-operation.
The 70-year-old businessman, a former associate of Tony Blair and Peter Mandelson, had maintained his innocence after being accused of paying bribes worth £40m to former managers of Aluminium Bahrain (Alba) in return for contracts worth £2bn.
At Southwark crown court in central London, counsel for the fraud office said it would present no evidence against Dahdaleh, leaving the judge to instruct the jury to return verdicts of not guilty on all eight charges.
"After careful consideration of all the circumstances of this case, the SFO has concluded that there is no longer a realistic prospect of conviction … and accordingly we will offer no evidence," said Philip Shears, lead counsel for the prosecution.
With the SFO not presenting any evidence, the judge instructed the jury to return verdicts of not guilty on all eight charges. The jury was then discharged.
The long-running case had involved allegations of corruption at senior levels of government and business in Bahrain, a sensitive issue at a time of political unrest in the Gulf kingdom.
Dahdaleh, a British-Canadian national, had pleaded not guilty to all the charges relating to events between 1998 and 2006 at Aluminium Bahrain (Alba), the world's fourth-largest aluminium smelter, which is majority-owned by the Bahraini state.
Dahdaleh had been accused of paying bribes to former managers of Alba in return for a cut of the £2bn contracts.
One Alba chief executive Bruce Hall, 61, has pleaded guilty to a charge of conspiracy to corrupt. Dahdaleh was the only remaining defendant in the case.
The court heard that Alba accounts for 10% of Bahrain's GDP and nearly 70% of its non-oil exports. It is three-quarters owned by the Bahraini government.
The trial, which began in November, was expected to continue until next year and has so far cost millions of pounds.
It is understood that the costs of the case – the investigation into Dahdaleh began six years ago – will run to several millions of pounds.
The agency has been at the centre of a number of failed inquiries and collapsed trials. In August, the SFO said it had lost 32,000 pages of data and 81 audio tapes linked to a bribery investigation into BAE's al-Yamamah deal with Saudi Arabia. The investigation into the huge arms deal was discontinued in 2006 after intervention from Blair, the then prime minister .
The shadow attorney general, Emily Thornberry, said the case had highlighted that the SFO "cannot be relied on" to carry out complex investigations.
"This collapse shows that the government has yet to put the SFO on a sustainable footing," she said.
"The SFO under this government has lurched from shambles to shambles and cannot be relied on to carry out the complex investigations and prosecutions it was created to undertake."
"As long as ministers fail to get a grip of this situation, the taxpayer and the UK's reputation for fighting economic crime will suffer."
Government insiders have said that the new National Crime Agency, which was launched in October, could take over some of the work of the SFO.
In a statement, the fraud office said it had decided to withdraw from the case after its key witness, Hall, changed his evidence during the trial. Two other key witnesses refused to attend the trial, it said. "That impacts on the fairness of the trial as well as the prospects of conviction," it added.
Neil O'May, a partner at the legal firm Norton Rose Fulbright, which represents Dahdaleh, said the SFO had serious questions to answer about the case.
"It is an emotional day and [Dahdaleh] has been overwhelmed and relieved by the acquittal," said O'May. Dahdaleh will seek recovery of his legal costs, he added.
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