Tigon: Bennett ordered to address R150m Shawcell deal

State’s first witness accuses Porritt of using investor funds to pay for Shawcell shares.
Tigon-accused Gary Porritt (left) and Sue Bennett (right) in court during November 2017. Picture: Moneyweb

Judge Brian Spilg on Tuesday ruled that Tigon-accused Sue Bennett must on May 20 put forward her version about using R150 million of investors’ money to buy millions of “worthless” shares in Shawcell, a listed company and subsidiary of the financial services group Tigon.

Bennett and her co-accused Gary Porritt are standing trial on more than 3 000 charges including fraud, racketeering and contravention of the Companies Act, Income Tax Act and the Securities Exchange Act. Porritt was the CEO of Tigon, which was a top performer on the JSE before its collapse in 2002 and Bennett was a director.

The pair is conducting its own defence.

Bennett is currently cross-examining the state’s first witness, Jack Milne, who is the former CEO of Progressive Systems College (PSC). PSC ran an investment fund called Progressive Systems College Guaranteed Growth Limited (PSCGG) that was underwritten by Tigon.

He earlier testified that he, Porritt and Bennett conspired from the inception of PSCGG to defraud investors. They promised investors that they would put their money in a diversified portfolio using Milne’s investment approach, which was well-known at the time, but instead invested in only Tigon and Shawcell shares with Porritt being in charge of the investments, Milne testified.

He earlier reached a plea and sentence agreement with the state and served a term in jail for his part in the events.

The trial was postponed on February 26 after Porritt was hospitalised for an injury on his hand, allegedly the result of a jailhouse brawl. Porritt has been in custody since mid-2017 after he failed to appear in court. Proceedings resumed on May 2. 

Porritt was in court on Tuesday, looking well and without any apparent issue with his hand. He boasted a new, short haircut, seemingly his first since he was incarcerated.

Bennett on Tuesday questioned Milne at length about earlier correspondence between him and Arnold Basson, an investor in PSCGG who eventually, together with co-investor Johan Borstlap, applied for the liquidation of PSC.

She confronted Milne with a letter from him to Basson, in which he responded to questions about bad publicity and litigation relating to Tigon. Among other things, Milne accused Media24 of being “totally biased” and driving “a vendetta” after it published 37 adverse articles about Tigon and its associates, including PSCGG, in the previous two weeks.

He admitted that he told Basson in the letter that PSCGG was invested in the bond market, even though he denied earlier during the trial ever having said the fund invested in bonds.

Milne said at the time of his testimony that he believed his statement was correct and had forgotten about the letter.

Bennett repeatedly asked Milne whether he gave the correspondence with Basson to the state and the PSC liquidators. When questioned by Spilg, she said her line of questioning went to the credibility of Milne as a witness and prejudice by the state against her and Porritt.

She said the collapse of the company was brought about by fraudulent tax assessments issued by the South African Revenue Service (Sars).

Sars is funding the current prosecution by the state.

Spilg warned Bennett that it does not assist her case to show that Milne was lying at the time. He said Mine’s version was that it was indeed a fraud and he implicated Pottitt and Bennett as party to it.

Spilg then asked her what the relevance of her line of questioning would be if it were to be demonstrated that the R150 million PSCGG raised from investors was traceable in the hands of her and Porritt. He nevertheless allowed her to continue.

When questioned about his statement in the letter to Basson that none of the funds found their way to Porritt, Milne said he was still defending Porritt at that stage and “used the explanation Porritt manufactured to put them off their stroke”, referring to Basson and Borstlap. 

There were several heated exchanges between Milne and Bennett and he accused Porritt of using PSCGG’s investor funds to pay 55c per share for Shawcell shares while they were trading on the open market for 20c/share, all without his knowledge. “He told me afterwards. If I knew about it I would not have agreed,” he said. 

In response to a question from Spilg, Milne said there was no board resolution to authorise the transaction.

Bennett’s role as a director of PSCGG then came under the spotlight and Spilg told her she would have to deal with whether she knew about the transaction at the time or not. 

She responded saying she would get to it when she intends to. She said she was conducting the cross-examination the way she saw fit.

Spilg then ruled that she has to tell the court by Monday, May 20, whether she knew about the transactions or what her version of events is. “Time is running out,” he told her.

Bennet has before been warned repeatedly by the court to stick to relevant issues and to put forward her version, failing which, the court will draw (unfavourable) inferences.

The trial continues on Friday and will then be postponed until May 20. Bennett is expected to round off her cross-examination of Milne. After that Porritt still has to complete his. Forensic expert Professor Harvey Wainer is scheduled to testify in June.

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This is 12 years on? How is that even possible!!!

No law and order in SA…..that’s how.

There are no words to describe this case. Surely the powers that be should have a serious look at the way this is playing out. The more of a bandit one is the more likely one can evade ones sanction. This character is not alone in conducting this evasive tactic to evade justice and waste resources which could be be far better applied elsewhere. For s—t sake, govt, wake up..

Imagine then how long Steinhoff is going to take

Judge Spilg seems unable to deal with this crook.

EXACTLY!!! … And, they are defending themselves??!!

Or even worse how long will it take to prosecute the Guptas and Co! If ever!!!

End of comments.





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