Loads of evidence in LeisureNet case

Cape Town - The leading figures in the LeisureNet scandal were on Friday ordered by Advocate Peter Hodes (SC), who is heading the public inquiry, to hand over all documents in their possession to the commission of inquiry.

Among those involved are former LeisureNet CEOs Peter Gardener and Rod Mitchell.

They brought documents in four large cartons on a trolley into the room where the inquiry was being held.

Mitchell was ordered on Friday to give evidence before the commission on May 27, and Gardener must appear before the commission on June 3.

Another former board member who told the commission under oath that he had documents to submit was Sekunjalo Investments CEO Dr Iqbal Survé who formerly had an approximately 11% interest in LeisureNet.

Survé was ordered to hand the documents over within 14 days. He will give evidence before the commission on April 11.

At the time of its provisional liquidation in October 2000, LeisureNet owned a total of 85 Health and Racquet Clubs in South Africa with more than 900 000 members. The group's debt is estimated at about R1 billion. LeisureNet also had international interests through Healthland International in which it owned a 57.8% interest. Its South African activities were taken over by Richard Branson's Virgin group and are being run under the Virgin Active banner.

After the resignation of Gardener and Mitchell on August 29 2000, Coronation FRM Strategies director Peter Flack was appointed as LeisureNet's provisional CEO. Flack said on Friday he also had documents to submit. He was ordered to give evidence before the commission on April 23.

Chartered accountant Colin Hulzer, who became a director of LeisureNet in August 1995, said he had handed a computer disk with information documents relating to LeisureNet to his attorney. "I got rid of the documents when I resigned," he said. "I regularly destroyed a lot of documents that I had in my study at home because I didn't have space for them."

In reply to a question by Gavin Woodland, acting on behalf of the liquidators, Hulzer said nothing was "irretrievably lost". The documents include the minutes of board meetings, reports of executive committee meetings and internal audit reports. "All the documents are there, except those of the executive committee," Hulzer said. Hulzer was ordered to appear before the committee on April 18.

The commission's activities were suspended until March 1.

In his opening address before the commission on inquiry on May 18 last year, Woodland described the LeisureNet collapse as perhaps one of the biggest corporate collapses yet in the financial history of South Africa.

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