Court rules Tigon duo must face charges
28 April 2016
Posted by: Author: Lionell Faull
Author: Lionell Faull (BDlive)
The High Court has ruled that Gary Porritt and Sue Bennett should stand trial for 3,160 charges including fraud and tax offences, linked to their management of the once-listed Tigon in the 1990s and early 2000s.
The ruling draws to a close a decade-long series of pre-trial legal skirmishes initiated by the two. There have been 47 judgments by various courts, but the duo has yet to plead to the charges.
Mr Porritt and Ms Bennett alleged that the state had acted with ulterior motives, obtained false evidence from witnesses and had failed to disclose all relevant information for them to defend themselves.
But Judge Brian Spilg ruled last week: "None of the grounds on which a permanent stay is sought prior to the accused actually pleading to the indictment and evidence being presented at trial are extraordinary or can be said to constitute trial prejudice."
The spectre of the South African Revenue Service (SARS) "rogue unit" had hung over the hearing, with Mr Porritt and Ms Bennett claiming that a report done by auditing firm KPMG into the unit included evidence suggesting SARS had been biased against it. The KPMG report apparently cites an alleged meeting in 2001 between a one-time business associate of Mr Porritt (who Judge Spilg cites as "Mr X") and former SARS officials Ivan Pillay and Johann van Loggerenberg.
Mr X is known to be Richmark executive chairman Gavin Varejes.
Mr Porritt has claimed that this meeting was the start of SARS’s pursuit of Tigon on tax-related offences and that SARS had caused the collapse of Tigon by pursuing considerable tax assessments against it, while ignoring evidence Mr Porritt claims he uncovered against Mr Varejes.
Mr Varejes confirmed he was a complainant in Mr Porritt’s case, and could therefore not comment. It is understood that he will testify against Mr Porritt.
Mr van Loggerenberg said: "My role and significance in the matter has been greatly exaggerated." The 2001 meeting with Mr Varejes had been "quite brief", and "only covered basic aspects of allegations of tax evasion". It was immediately allocated to another investigator. "I played no further operational part in the case."
Last night, Mr Pillay denied "all charges of impropriety or improper conduct that the applicants have put before court".
"In my view, it is untenable and, indeed, undesirable, in law and in practice, that taxpayers who command substantial financial resources can apply any legal obfuscation to avoid, for more than a decade, their day in court to answer serious criminal charges," he said.
Judge Spilg ruled that the right place to test these claims was in a criminal trial. "The first difficulty facing the accused is that they have raised trial prejudice prior to pleading to the charge and prior to any evidence being led. They are therefore postulating situations where prejudice may arise, not that it has actually irreversibly done so at this stage," Judge Spilg said.
He said: "The built-in safeguard to criminal trials is the heavy onus imposed on the state to prove its case beyond a reasonable doubt." Judge Spilg observed that SARS’s later winding-up of Mr Porritt’s companies "at face value, appears heavy-handed and draconian".
"This resulted in the effective removal and freezing of company funds, which led almost immediately to placing in judicial management the cash cow companies in Porritt’s stable, and then almost as quickly the judicial management was replaced with a winding-up.
"The winding-up resulted in what Porritt claims were valuable businesses being sold at no actual cost to an associate of (Varejes)."
But Judge Spilg also observed that SARS had investigated Mr Porritt on a broader range of tax offences, had secured testimony against him by his former auditor, and had caught a SARS official who had allegedly assisted Tigon with fraudulent tax claims.
Mr Porritt and Ms Bennett also contested the appointment of private advocate Etienne Coetzee as lead prosecutor on the basis that Mr Coetzee had previously acted for SARS; as well as prosecutor Jan Ferreira, who had previously drafted an affidavit in a liquidation matter affecting Mr Porritt.
But Judge Spilg found that, on a balance of probabilities, "There is nothing to suggest that Coetzee or anyone else in the prosecutorial team were doing anything other than performing their job to the best of their ability and without bias or lack of independence and impartiality."
The charges against Mr Porritt extended not just to tax offences, but to multiple fraudulent representations Tigon had made to investors, he said.
Investors including 2,950 people who lost a combined R162m when a fund underwritten by Tigon collapsed suddenly have watched Mr Porritt’s court battles for years.
Earlier this month, details from the Panama Papers showed Mr Porritt’s deft use of anonymous shell companies registered in offshore secrecy jurisdictions. These companies were instrumental in transactions for which Mr Porritt will now appear in the dock.
This article first appeared on bdlive.co.za.