SA mogul’s name in leaks
2016-04-06 23:00
Edward West, The Witness
Pietermaritzburg - The name of Pietermaritzburg businessman and farmer Gary Porritt — still involved in a 14-year fight against more than 3 000 counts of fraud, racketeering and other offences — has popped up in the Panama Papers.
His actual trial, and of co-accused Susan Bennett, has not yet started.
They have been fighting various cases to avoid the trial, and this week were applicants in a high court action in Gauteng, trying to get a permanent stay of prosecution or, alternatively, to have the prosecution team removed.
“This application has run already for approximately eight to nine days and will hopefully finish this coming Friday. We will then await the decision by the judge,” said the National Prosecuting Authority’s South Gauteng spokesperson, Hurbetin Phindi Louw.
“We are confident that there is no merit in the application by the accused and that judgment will be given in the state’s favour,” she added.
In what has become a notorious corporate scandal in this country, Porritt was arrested in December 2002 on 3 160 charges under the Companies Act, Stock Exchange Control Act and Income Tax Act, as well as fraud and racketeering.
Porritt’s arrest led to the collapse of an investment fund underwritten by his Johannesburg-listed company Tigon.
About 2 950 investors in the PSC Guaranteed Growth fund lost R162 million.
Porritt’s Tigon had been the JSE’s best-performing stock for five consecutive years, but investigators believe the success was built on a series of fraudulent transactions designed to manipulate the share price.
Porritt was mentioned in the Panama Papers — a tranche of millions of leaked financial documents that detail billions of dollars that are sheltered in secrecy and from tax authorities in tax havens, by political, business and other figures.
According to the website of the AmaBhungane Centre for Investigative Journalism, the leak allegedly provides a 15-year snapshot of Porritt’s business affairs in secretive offshore locations such as Panama, British Virgin Islands and the Pacific island of Niue.
According to the website, the leak bolsters the state’s contention that Porritt masterminded an enormous financial racket.
It shows that from 1986 until his arrest in 2002, Porritt used the Panama-based law firm Mossack Fonseca to incorporate shell companies on his behalf in jurisdictions that offer a high degree of corporate anonymity.
There is no claimed evidence that Bennett had any dealings with Mossack Fonseca.
Porritt declined to respond to specific questions raised by AmaBhungane, because they contained allegations pertaining to his pending criminal trial.
The Panama Papers showed that Porritt opened shell companies via Mossack Fonseca over 15 years and paid the firm tens of thousands of dollars in administration fees from a Swiss bank account.
In this way, Porritt could wear a cloak of anonymity whenever he needed to operate beyond the oversight of business colleagues, investors and creditors, as well as regulators, and tax and law enforcement agencies.
“Crucially, it enabled him to do business with himself, but make it look to outsiders like a legitimate arms-length transaction,” the website said.
Porritt allegedly bolstered his companies’ balance sheets by swapping assets and liabilities between companies, creating or erasing vast sums of money at a single stroke.
The NPA did not respond to questions from The Witness on whether the Panama Papers would affect their prosecution of Porritt in any way.
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