You've covered most of it, WWW, as ever, but here's my tuppennyworth: I too know the instructor in question - he was in fact one of my instructors at BAe Prestwick, and is I think it's fair to say an example of the top echelon of instructing.
Every time we as instructors send someone off solo we place a certain amount of trust in them, in their integrity as well as their abilities. From what I know of the case this student broke that trust and paid the price. I never fell out of cloud that I shouldn't have entered with the aircraft's wings fluttering behind me BECAUSE I WAS TOLD NOT TO. So was he, whether from another culture or not. The judgement is utter bollocks and to my mind raises questions about the objectivity of the court.