Sydney-based insurance executive Charles Pratten has had charges alleging he threatened a federal police officer dropped.

The 50-year-old founder of the Rural & General insurance group still faces seven counts of obtaining financial advantage by deception, and has been committed to stand trial in the Supreme Court next month.

He had also faced one count of “threatening serious harm to a commonwealth officer” but federal prosecutors’ dismissed the charge during a local court hearing in Sydney last Tuesday.

Prosecutors allege Mr Pratten misappropriated funds by sending millions to Vanuatu from his Sydney-based brokerage between 2003 and 2009.

They say the funds were disguised as payments to a Vanuatu insurance company and that Mr Pratten then transferred $5 million for use as undeclared income.

Mr Pratten has denied having either an overseas income or a company outside Australia.

In a statement to insuranceNEWS.com.au last week, Mr Pratten says the decision to prosecute him “is unprincipled, wrong and unfair under the circumstances”.

He says he denies all the charges, which “are based on legal deficiencies and factual mistakes in the Commonwealth’s case”.

While he would welcome the opportunity to comment further, his lawyers have advised him “to exercise [my] legal right of silence”.