Fraud charges against Nazim Gillani, the Toronto businessman at the centre of illegal lobbying allegations against former Conservative MP Rahim Jaffer, have been set aside in a Newmarket, Ont., courthouse.

Nazim Gillani appears as a witness at a standing committee on government operations and estimates on Parliament Hill in Ottawa in April. (Sean Kilpatrick/Canadian Press)

Gillani had faced one count of fraud and one count of conspiracy to commit an indictable offence in a matter unrelated to his business dealings with Jaffer, husband of former Conservative cabinet minister Helena Guergis.

The charges were withdrawn because the Crown prosecutor in the case said there was never any prospect of conviction, the CBC's Dave Seglins reported from the courthouse Thursday.

Gillani did not attend Thursday's proceedings. But his lawyer, Brian Greenspan, told reporters outside the courthouse the review of the case disclosure "demonstrates the total absence of any misconduct" by his client.

Greenspan also lashed out at the media for its coverage of his client during the Jaffer-Guergis affair, saying he has been "plagued by false rumour, innuendo and suspicion."

In a statement issued through his spokesman, Brian Kilgore, Gillani said he was delighted, but not surprised by the decision.

"There was no reason to ever have laid the charge in the first place," the statement quoted him as saying.

The decision comes a day after the RCMP informed Jaffer and his wife, MP Helena Guergis, that the force was closing its investigation of the couple and concluded there's no evidence of criminal wrongdoing by either.

Prime Minister Stephen Harper kicked Guergis out of the Conservative caucus in April after calling in the Mounties and the federal ethics commissioner to investigate unspecified allegations against her.

But Guergis, who continues to sit as an independent MP for the central Ontario riding of Simcoe-Grey, has denied any wrongdoing.

Assertions challenged

Gillani has told a parliamentary committee he sought a business relationship with Jaffer because the former MP and his partner, Patrick Glémaud, said they "knew how to negotiate the government maze" and gain access to government grants.

He also challenged Jaffer's assertion that no business relationship existed between his company and Gillani's firm by providing the committee with a copy of a written contract between the two businesses.

In his first committee appearance in late April, Jaffer testified that he and his partner, Glémaud, realized very quickly after meeting Gillani that there was "no synergy" between the two firms.

In a subsequent committee appearance in June, Jaffer told MPs he was "ill-prepared" for his previous testimony and inadvertently gave "incomplete" information at the time.

Jaffer, who is not registered as a lobbyist, has denied that his inquiries constituted lobbying and says he's never received any federal money.

Jaffer, who was arrested last September and charged with cocaine possession and drunk driving, also said he had a "challenging fall" and "wasn't as involved in my business as I should have been for a number of months."

The charges were later dropped in a deal that saw Jaffer plead guilty to careless driving and pay a $500 fine.