Cleared financier calls for public investigation into handling of his case

A high-profile financier who has been finally cleared of all criminal charges has spoken out for the first time to call for the investigation into the handling of his case to be held in public.

Richard Hughes, the founder of Manchester firm Zeus Capital, was told this week that the Crown Prosecution Service will take no further action against him.

Two years ago Hughes and nine others were accused of a major tax fraud involving a £134m tax investment scheme.

The charges came after an investigation which spanned more than three years.

Last May all the charges were dropped and this week it emerged that CPS had finally acknowledged that it would not be pursuing the case.

Mr Hughes’ legal team received a letter from the CPS confirming the legal saga had finally come to an end.

This was the final confirmation for the financier that he can now put the whole episode behind him.

Despite being cleared Mr Hughes is still furious at the way his case has been handled by the authorities and is calling for any inquiry to be held in public.

He said: “Answers need to be given as to why an unlawful prosecution was allowed to proceed.

“The internal investigations being carried out within both HMRC and CPS need to be open and transparent to ensure that this doesn’t happen again.”

He added: “ The admissions of a fundamental failure to follow reasonable lines of enquiry, wholesale failures in the disclosure process and a premature charging decision show systemic failings at every level of both the CPS and HMRC and that needs addressing.

“I expect the internal investigation to be open and transparent and urge Simon York and Alison Saunders to publish the findings of these investigations so this does not happen again.”

Anthony Barnfather, a leading regulatory investigation expert, who represented Richard Hughes, said: “In defending serious fraud cases for 20 years I have only on one previous occasion uncovered such systematic failings.

“The grave admissions now made by the prosecution are unprecedented. It deeply concerns me that reviewing lawyers and team leaders failed to pick up on serious breaches of codes of practice much earlier.

“We had to force these admissions and my guess is that we have only seen the tip of the iceberg so far. My views are well known, this case should never have been prosecuted. The costs to the public purse will run into many millions of pounds.”

Mr Hughes faced two charges of conspiracy to defraud and intent to defraud HM Revenue and Customs by making claims for capital loss relief.
A trial was due to be held in Birmingham at the start of this year but was shelved after the charges were dropped.

Tom Handley, director of Chambers at Barristers’ Chambers, Exchange Chambers put together Richard Hughes’ defence team.

He said: “From the very beginning, Richard’s legal team at Chambers have maintained that the case against him, and his co-defendants, was fundamentally flawed.

“After the charges were dismissed last year, the only procedure available to the Crown to keep the case going was a voluntary bill of indictment.

“The voluntary bill of indictment procedure is available when there is new evidence, there has been a serious procedural irregularity, the judge has erred in law, or it is in the interests of justice to grant it.

“The CPS has now confirmed it does not intend to seek a voluntary bill of indictment meaning the final legal hurdle has been cleared and Richard can move forward without these charges hanging over him.”

The CPS has commissioned an internal investigation into the conduct of this case, while HMRC has appointed an internal governance team to conduct a review.

The long-running investigation focused on Zeus Partners, a separate business that sold investment schemes generating tax relief for high net worth investors.
Zeus Capital has built a reputation for bringing big name flotations including Purplebricks and online retailer Boohoo to the market.

Mr Hughes stepped down as a director of Zeus Capital but is still a shareholder and acts as an adviser.

The CPS has been under fire in recent months and has been criticised over the collapse of several major inquires.

Alison Saunders, the director of public prosecutions, announced at the start of the week that she is standing down in October after five years in the role.
A spokesperson for CPS confirmed that no further charges will be brought against Mr Hughes.

The spokesperson said: “This was an extremely complex case which required prosecutors and external counsel to consider a substantial volume of material.

“The case against the defendants charged with conspiracy to defraud the public revenue was dismissed by the court on the basis of the wording of the charges.
“At a hearing in March 2018 the CPS confirmed to the court that the prosecution will not seek to have the charges in this case reinstated.”