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Rubbish. Back in primary school it was a common insult to say that someone stinks, in particular if someone is in your face, and there was no racial motivation. It's a very childish thing to do but I have never heard of it being linked to racism before.

He should be upset that it wasn't possible to be fully exonerated, not proven was the best possible outcome for him. If he didn't say anything racist then I would imagine that he is still very upset.