Co-accused in R160 mln fraud case granted legal aid

2009-01-30 00:00

Tigon chief executive Gary Porritt and his co-director Sue Bennett — co-accused in what could turn out to be South Africa’s biggest ever fraud case — will get legal aid. This is despite the fact that they posted nearly R1 million in bail after they were arrested in December 2002 and April 2004 respectively and stand accused of having “unlawfully expropriated” more than R160 million in investors’ money, which was never recovered.

Porritt lives on farms in the midlands that his detractors claim are worth millions. They allege Bennett has farmed out her assets to family members, with her children listed as the legal owners of properties.

However, in what is seen as a desperate attempt to get the case to court, Johannesburg High Court Judge Geraldine Borchers last week rubber-stamped the pair’s application for legal aid. Porritt and Bennett have twice appealed against the Legal Aid Board’s original decision to deny them legal aid based on their failing the means test.

The protracted legal aid battle has been seen as yet another ploy by Porritt and Bennett to delay the case further. They in turn have accused the state of dragging its heels in preparing its charges.

This latest development raises the question of whether the pair can afford to defend themselves against a staggering 3 160 charges, including fraud, theft, tax evasion, share price manipulation and racketeering. They have also been accused of contravening exchange control regulations, the Companies Act, the Stock Exchange Act and the Income Tax Act. They have pleaded not guilty.

In September 2007, Bennett told the Financial Mail that the legal bill would come to around R60 million. She argued that they were not only entitled to legal aid, but to legal aid of the same quality enjoyed by the state, which is able to use private counsel and call expert witnesses.

Although the charges brought against Porritt and Bennett cover their dealings in listed entities Tigon (suspended from the JSE in December 2002) and Shawcell, public interest centres on their roles in the demise of the infamous PSCGG Growth Fund, which hit the wall in 2003. More than 3 000 investors (of whom 55% are pensioners) lost an estimated R162 million.

Porritt reportedly bought 70% of PSCGG (via listed company Tigon) in 2000 and allegedly masterminded the schemes that led to its demise. Although investors claim he pulled the strings, he was not officially a director. However, Bennett was.

To this day, the Tigon/PSCGG paper trail has proved a difficult one for investigators and liquidators to follow. It is thought that money invested in PSCGG was siphoned into sister companies, EBN Trading and Awethu Trust. Instead of being spread across a variety of shares as promised, investor funds were used to buy shares in Tigon and Shawcell. The boosted Tigon and Shawcell shares were discovered to be worthless when questionable accounting practices were uncovered.

PSCGG head Jack Milne, who was found guilty and jailed for his role; Grant Ramsay, Tigon’s auditor, who was sentenced to 10 years for contravening the Income Tax Act; and Andries Geyser, a former chairman of Tigon, who pleaded guilty to reckless trading, turned state witnesses in plea bargains.

Porritt and Bennett will return to the high court on Tuesday to confirm that legal counsel has been appointed and to set down timelines for any further applications. A formal court date is still to be set.

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