This emerged last week after Judge Jeffrey Rucker threw out the case before a jury could be sworn in. Summing up, he asked: "Why on earth are public funds being used to sort out the problems of high-risk venture- capital investors for whom the scheme has gone wrong?"
But the public purse could be hit once more, as the Libyan businessman, Abdul Kadiki, is seeking hundreds of thousands of pounds in compensation. He has instructed his lawyers to sue the police for wrongful arrest, false imprisonment and malicious prosecution.
City of London fraud squad began the ill-fated investigation in November last year after the two foreign businessman fell out over a multimillion- dollar venture. The only British connection involved $3.5m (pounds 2.2m) deposited in the London branch of an Arab bank.
Within days Mr Kadiki was arrested and remanded in custody to Wandsworth prison for three months. He asked criminal fraud experts Chadwyck-Healey and Co to represent him and the firm applied for legal aid with nil contribution on his behalf. Although not a British citizen, he was eligible on the grounds that he had no means of defending himself in court. City of London Police continued the investigation and one detective flew to New Zealand only last month for 10 days to interview potential witnesses.
Labour MP Bob Marshall-Andrews, who is also a lawyer who specialised in criminal fraud, is now calling on the Director of Public Prosecutions to lay down clearer guidelines for fraud prosecutions.
He said: "Large commercial fraud cases inevitably are very expensive and frequently cost a substantial proportion of the legal-aid budget ... it is essential that prosecuting authorities carefully investigate the nature of commercial transactions ... [particularly] where the commercial venture which forms the basis of the alleged fraud is a venture between wealthy and experienced businessmen.
"If this aborted trial achieves that result then it will not have been aborted in vain."
In his summing up at Southwark Crown Court, Judge Rucker said: "It is high time this case was laid to rest before more public money is wasted." He praised the defence team for the "highly commendable and efficient" way they had saved substantial costs to public funds.
Mr Kadiki said from abroad last week: "I shall return to England shortly to try to restore my reputation through the courts."Reuse content