UPDATE 3-UK bribery trial collapses in blow to anti-fraud agency

Tue Dec 10, 2013 4:15pm EST
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* Serious Fraud Office calls off Dahdaleh prosecution

* Trial collapse is serious setback for demoralised agency

* Case addressed alleged high-profile corruption in Bahrain

* Judge expresses concern over conduct of case

By Estelle Shirbon

LONDON, Dec 10 (Reuters) - One of Britain's biggest corruption trials in years came to an abrupt halt on Tuesday when the Serious Fraud Office (SFO) called off the prosecution of businessman Victor Dahdaleh in a further setback for its already tarnished reputation.

The SFO had accused Dahdaleh of paying some $67 million in bribes to former managers of Aluminium Bahrain (Alba), including a member of Bahrain's royal family, between 1998 and 2006 in return for a cut of contracts worth over $3 billion.

The case 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.

But the SFO's lead counsel told a London court there was no longer a realistic prospect of conviction after two U.S. lawyers who had played a crucial role in the case refused to testify in court and a key witness changed his evidence.   Continued...