On the first day of his trial at Blackfriars Crown Court, London, Smith reversed a previous plea denying all charges.

The millionaire businessman, 50, pleaded guilty to ten charges of theft and one count of false accounting.

In 2002, Smith, a director of Orb, a now-defunct Jersey-based investment group, phoned Morley Fund Management, with a proposition to turn Izodia into a property vehicle. He wanted to buy Morley’s stake in the cash shell and pay above the market price.

The talks collapsed, leaving Morley with its shares. Later it emerged that Izodia’s single major asset, a £33 million cash pile, was missing and allegedly had been transferred to companies connected with Orb.

Izodia peaked at the height of the dot-com boom when it saw its market value soar to £1.7 billion in March 2000. Management raised £130 million from the City a month later, but by mid-2002 Izodia was a cash shell with £33 million in its accounts.

Smith’s investment company, Orb, was the largest shareholder in Izodia, with a stake of 29.9 per cent.

The Serious Fraud Office dropped two counts of conspiracy to defraud and one count of forgery. The SFO also decided not to pursue its prosecution of Jarlath Vahey, a colleague, who had also been charged with conspiracy to defraud and theft.

Smith and Mr Vahey were accused of transferring millions of pounds from Izodia’s bank account to Mitre Property Management, a unit of Orb. They were alleged to have told the bank that they were authorised to make the transfer. Mr Vahey, previously a director at Izodia, has denied the charges.

Smith will be sentenced on May 25.

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