The Securities and Futures Commission (SFC) was daunted by businessman Meocre Li's reputation and expertise when it abandoned a disciplinary inquiry that may have affected his standing as an expert witness, a judge said yesterday. It was also anxious to ensure he would be able to fulfil his role as an expert witness for the prosecution in the $680 million Allied Group fraud trial, he added. Mr Justice Conrad Seagroatt criticised the SFC for failing to disclose that the investigation into questionable share transactions had taken place when it knew Mr Li was due to give evidence in the fraud trial. It was these factors that led the judge to conclude a fair trial could not continue and to permanently halt the proceedings against former Allied Group chairman Lee Ming Tee at the Court of First Instance yesterday. Mr Justice Seagroatt said one of the main SFC investigators did not deliberately set out to prejudice the case of Mr Lee and Ronald Tse, his fellow former Allied executive. But he was influenced in his handling of the investigation by a CV provided by the businessman's lawyers. This had portrayed him as 'the very model of a modern chief executive', citing his membership of the Listing Committee of the stock exchange and his previous appearances as an expert witness, Mr Justice Seagroatt said. But the decision by the SFC investigator to refuse to allow Mr Li's solicitors to inform the Department of Justice about the disciplinary investigation and the fact it may have affected his status as an expert witness was a 'high-handed act', said the judge. Mr Justice Seagroatt added that Mr Li had been given special treatment by the SFC, which had acted unfairly by instead targeting a subordinate, who received a public reprimand over his role in the affair. 'I have no doubt that [the investigator] accorded Meocre Li deliberately favourable treatment because of his reputation and career . . . and that included the fact that he was an expert witness due to give evidence in an important trial which would start within a few months time. 'The effect was to contrive a false picture, and to conceal what were material matters. A distortion was created.' Mr Justice Seagroatt said when he first stopped the fraud trial on March 22, it was because of the non-disclosure of Meocre Li's involvement with a mainland company, Guangdong Kelon, under the scrutiny of the stock exchanges of Hong Kong and Shenzhen. But after investigations by Mr Lee's law firm, Haldanes, it emerged that Mr Li had not mentioned the SFC investigation either - and nor had the SFC. Mr Justice Seagroatt said it was this non-disclosure by the SFC that was at the heart of yesterday's decision to permanently stay proceedings. In his judgment, Mr Justice Seagroatt listed a litany of shortcomings in the SFC's investigation. The investigation, which began on September 8, 1999, found ICEA Finance Holdings, of which Mr Li was chief executive officer, was used as a front for the transaction of shares in Kin Don Holdings, a publicly listed company. The SFC failed to push Mr Li to attend an interview or insist on more than a written reply to five questions. It also handed over all the evidence to Mr Li before he was confronted with the allegations, the judge said. And during interviews with Mr Li's subordinates, the SFC made recordings. None were taken with Mr Li.