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Fraud charges against the former chief executive and two other directors of Durex condoms manufacturer SSL International have been thrown out of court.
Iain Cater and his finance director, Paul Sanders, together with Dieno George, the managing director of SSL in Europe, were the most senior people to face criminal charges over the alleged two-year fraud scandal at SSL.
Mr Cater, Mr Sanders and Mr George had been charged under the Theft Act in November 2003, along with two others, with making false statements as directors. Charges came after the Serious Fraud Office carried out a two-year investigation. A dossier had been referred for criminal investigation after an internal SSL review of how sales and profits had been accounted for.
Two years earlier, SSL had been forced to restate its accounts, conceding that sales had been flattered by £22m and profits by £19m in the 25 months to March 2000.
A judge sitting at Chester crown court ruled last month that charges should be dismissed, however. The decision could not be reported in full until today because of reporting restrictions. Further comments from the judge also cannot be published for legal reasons.
Mr Cater was first appointed financial controller at Seton Healthcare 25 years ago, at the age of 27. He became the driving force of the business, floating it on the stock exchange in 1990 and pursuing more than 35 acquisitions of healthcare brands and companies. One analyst said: "The board is like a family and Iain is the godfather." But after a boardroom row he was dismissed in February 2001.
Charges remain against Christine Davenport, a finance director who worked under Mr Sanders, Brian Ruane, a UK sales director, and Colin Wilson, a purchasing director at AAH Pharmaceuticals. No date has been set for their trial.
The dismissal of charges against three former directors of a public company comes as a blow for the SFO, which has suffered several setbacks in high-profile cases.
The SFO was criticised three years ago for pursuing a case against senior executives of the DIY chain Wickes. Some felt there was more likelihood of securing convictions against middle management and suppliers.
In 2003, the entrepreneur Andrew Regan was acquitted of orchestrating a bribery scandal while two buying executives from the Co-op were convicted of taking the bribes.
In the past, the SFO has pointed to its overall conviction rate as evidence of its performance. Last year, however, the rate fell to 51%, the lowest since a disastrous spell in the early 1990s. It has been in steady decline over the last five years, but still averages 74%.
In a separate development, the former finance director of the troubled menswear chain Ciro Citterio was charged by the SFO with conspiracy to defraud, along with four alleged co-conspirators.
Ramesh Sthankiya appeared yesterday at Birmingham magistrates court accused of colluding with two suppliers, Don Ashford and Paul Syers, and separately with Ian and Gary Stewart, of AG Shop Fitters.
Ciro Citterio, which operated 150 stores in the UK and Ireland, was placed into administration almost four years ago. The group was then acquired by the Dubai-based Trident Fashions - only to topple back into the hand of administrators two years later.
A number of court hearings have led to the disqualification of four former bosses from action as directors.
Simon Bowers
The Guardian
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