Andrew Regan has been cleared of stealing £2.4m from Hobson, the food group where he was chief executive, to use the money to bribe two Co-op managers to extend a food supply agreement.

The Serious Fraud Office alleged that the money stolen from Hobson in 1995 was used to bribe the Co-op’s Allan Green and David Chambers to extend a £220m-a-year supply agreement with Hobson for 30 months. The SFO said Regan's acquittal was not a disaster for the SFO.

Regan insisted he was the victim of a dishonest Israeli businessman, Ronald Zimet, who disguised himself as a broker and paid the £1m bribes through his offshore company, Trellis International, retaining £400,000 for himself. Zimet was a key witness for the SFO after winning immunity from prosecution and claimed to have been the middleman in Regan's plan.

Sir Graham Melmoth, the former Co-op chief executive, queried the decision to use Zimet as a witness: "I would have had a better opinion of the SFO's decision if the jury had found Mr Regan guilty. Given they didn't, one must wonder about the efficacy of their approach."

The Co-op is bringing civil proceedings against Zimet and Trellis, as well as Regan, Green and Chambers. It said: "We will proceed with our civil action for damages, which we estimate to be in excess of £10m."

The Snaresbrook Crown Court acquitted Regan in a case that lasted six years.

In April 2002, the Co-op directors involved, Allan Green and David Chambers, were jailed for three and half years for corruptly accepting £1m each. Another defendant, lawyer Paul Thomas, was acquitted. The jury was undecided on Regan.

Regan returned to court in January this year but the retrial was abandoned just a week into proceedings after a juror alleged he had been approached.