British bribery case against billionaire Victor Dahdaleh collapses

PUBLISHED : Wednesday, 11 December, 2013, 3:41am
UPDATED : Wednesday, 11 December, 2013, 3:41am

One of Britain's biggest corruption trials in years came to an abrupt halt yesterday when the Serious Fraud Office (SFO) called off the prosecution of Canadian-British billionaire Victor Dahdaleh in a further setback for its already tarnished reputation.

The SFO said it offered no evidence against Dahdaleh, having concluded there was no realistic prospect of conviction. The case fell apart after a key witness altered his story and two American witnesses refused to take part.

The SFO had accused Dahdaleh of paying about US$67 million in bribes to former managers of Aluminium Bahrain (Alba), the world's fourth-biggest aluminium smelter, between 1998 and 2006 in return for a cut of contracts worth over US$3 billion.

The 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 secretive Gulf kingdom.

The sudden collapse of Dahdaleh's trial, which began on November 5 and had been expected to run into next year, followed costly blunders by the SFO in other high-profile cases that had piled pressure on the agency to deliver notable convictions.

Addressing the jurors before discharging them, Judge Nicholas Loraine-Smith said he had asked the SFO to reconsider its position after becoming concerned about a particular aspect of the case.

He reminded them that an SFO witness, case officer Sasi-Kanth Mallela, claimed the agency had effectively delegated its investigative duties in Bahrain to lawyers from the US firm Akin Gump, which acts for Alba.

The judge said these lawyers were representing Alba in a "hotly contested" US civil lawsuit against Dahdaleh, raising a potential conflict of interest between their assistance to the SFO and their own interests in the US legal action. Outside court, Dahdaleh's lawyer Neil O'May said it was an emotional day for the 70-year-old businessman, who was "overwhelmed and relieved" by the not guilty verdicts.

Dahdaleh admitted making payments to Alba managers, but pleaded not guilty, citing "principal's consent", a defence available under Britain's Prevention of Corruption Act 1906.

Additional reporting by Associated Press