Celtic Energy and M&A Solicitors staff cleared as fraud case is thrown out

Eric Evans and Alan Whiteley Eric Evans and Alan Whiteley are the two partners of M&A Solicitors

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Six people accused of a multi-million pound fraud conspiracy involving the sale of four opencast mining sites have had the case against them dismissed.

They were accused of planning to set up a company in the British Virgin Islands and transfer leases for the sites from Celtic Energy to avoid it having to restore them once coal extraction ends.

But a Cardiff Crown Court judge said nothing unlawful had taken place.

The Serious Fraud Office (SFO) said it was studying the judgement.

The six, which included former Cardiff City chief executive Alan Whiteley and former directors of Celtic Energy, Richard Walters and Leighton Humphreys, were charged with conspiracy to defraud Neath Port Talbot, Bridgend, and Powys councils along with the Coal Authority.

Once coal extraction ends, a company has an obligation to restore opencast sites - the estimated coast of restoring the East Pit site is £115m.

Analysis

Fraud cases are notoriously complex which is why they take so so long to investigate and why juries are often left baffled by the detailed information they're asked to absorb.

But this high profile multi-million pound fraud case was thrown out before it even reached that stage by a judge who said no jury could properly convict on the evidence presented by the prosecution.

Mr Justice Hickenbottom said that while some may consider the defendants' actions "dishonest" or "reprehensible" they were not unlawful because the transferring of the leases from Celtic Energy to Oak in the British Virgin Islands was perfectly legal.

Oak was set-up, owned and controlled by Celtic Energy and its legal team who were the people charged with the conspiracy to defraud.

The judge raised questions about the consistency of the prosecution's approach to the case.

He concluded the case had no victim because the three councils and the Coal Authority had not lost out financially from the land deal.

Celtic Energy, Oak and the councils involved continue with discussions over the renovations of the sites.

There is likely to be agreement that the finance will be available to cover the full restoration of the two smaller sites though the two bigger ones might prove more contentious.

It was claimed under the plan, a new company would have been set up, called Oak Regeneration.

Oak Regeneration would have been under the control of Celtic Energy.

But it would mean that Caerphilly-based Celtic Energy was no longer obliged to pay to restore opencast sites.

No criminal action

After five days of legal submissions, Lord Justice Hickinbottom threw the prosecution case out saying that the six defendants had not acted unlawfully regardless of whether or not they had acted dishonestly.

"Lawful conduct cannot be rendered unlawful by the means," he said.

He added that conspiracy to defraud could not be proved in common law because the object of the conspiracy - the local authorities and the coal authority - had not suffered financial loss as a result of Celtic Energy/Oak Regeneration deal.

The court heard that the six may have been aware that the scheme was unlawful and might lead to prosecution and that they took legal advice to that effect.

But the judge said he could not judge "commercial morality".

After the hearing, an SFO spokesperson said: "We are studying the judgment carefully. As part of that process we are urgently considering whether to ask the High Court to permit the case to proceed."

Celtic Energy produces one million tonnes of coal per year from its sites in south Wales.

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