A criminal case against a former executive of one of London’s leading app designers, in which she was accused of defrauding the company to splurge on expensive handbags has collapsed.

Mita Davda, ex-chief operating officer at City firm Apptivation, which counts TSB and Diageo as clients, was last year charged with fraud over personal expenses of more than £5000.

She was charged with fraud in connection with recruitment fees of approximately £135,000 paid to her husband Nelesh Panchal, and he was charged with money laundering in relation to his receipt of those fees.

Both were acquitted on Monday when the trial was dropped after a week. It followed Judge Cahill’s invitation to the Crown Prosecution Service to “consider their position”.

“Some of you during last week may have been sitting there thinking ‘What are we doing here?’ It will not take you by surprise as this is clearly a civil case, not criminal,” she said in court.

Represented by Corker Binning, Davda, who was alleged to have used the company PayPal account and corporate cards to make personal purchases and transfers to her personal accounts, said: “The relief for Nelesh and I is phenomenal.

“The stress we have endured over the last two years has been unbelievable but we kept the faith.”

A spokesman for Apptivation said: “We are surprised the CPS have decided not to pursue criminal charges, and we are considering our rights to review the decision by the CPS.”