A tycoon who spent £40 million on classic cars is suing a car dealer he invested with, claiming he is a “serial fraudster” who invented fictitious buyers and sellers.

Mike Tuke, an engineer, began investing when he sold his pioneering prosthetics company, Finsbury Orthopaedics, in 2009 for over £60 million.

The High Court heard he was “not overly impressed” with returns on standard investments and so after a “long and amiable meeting” with Derek Hood, an Essex car dealer, he decided to put his cash into classic cars.

Mr Tuke says the dealer told him classic cars were “better than banks” and that he “could double his money”.

Between December 2009 and March 2013, he bought 40 iconic motors,

including a Jaguar XKSS, Jaguar Group C racing cars, a Ferrari 250TR and Lister Knobbly, at a total cost of almost £40 million.

Mr Tuke, from Guildford, is now suing Mr Hood and his company, JD Classics Ltd, for around £9 million. Sean Brannigan QC, for Mr Tuke, said the businessman was determined to prove that Mr Hood is a “serial fraudster”.