Mungo Soggot
Mafia boss Vito Palazzolo surfaced in the Johannesburg High Court recently to bat off extraordinary claims that two Johannesburg businessmen paid him R2-million for the use of his police contacts.
Although Palazzolo only gave evidence, he retained former Witwatersrand attorney general, Klaus von Lieres und Wilkau, SC, to sit in on his testimony – a fact used to support the claim that Palazzolo has close links to the authorities, and in particular those of the old regime.
Palazzolo’s four-day testimony has been the most sensational feature of the trial of Norman Knight, who is accused of ripping off his former employer, the Premier Group.
Knight and a former colleague face 16 counts of fraud and mismanagement. One charge stems from Knight’s payment of R2-million of Premier’s money to Palazzolo.
The prosecution says Knight and his co- accused, Ockie Schoeman, paid Palazzolo the money as part of a complex deal in terms of which Premier was to buy out Palazzolo’s mineral water plant and a Plettenberg Bay stud farm.
Knight formerly headed a pharmaceutical company, Medical Cash & Carry, that was bought by Premier in 1991. Schoeman was Knight’s financial director.
The prosecution says Palazzolo, who has been tagged by the Italian and United States authorities as one of the world’s pre-eminent mafiosi, arranged the deal after discussing with Knight and others the possibility of giving them some financial advice.
The prosecution, led by Dean Friedman of Gobodo forensic accountants in Johannesburg, says the money was paid via a middleman, Plettenberg Bay businessman Bernard Rens.
The defence says no such deal was discussed, and that Palazzolo was paid the money after promising to use his police contacts to find out about the police investigation into Medical Cash & Carry. The defence says the documents submitted by Palazzolo and the prosecution laying out the stud farm and water transaction are false.
Premier lodged its complaint after one of Knight’s associates at Medical Cash & Carry was acquitted of dealing in stolen property. Knight was not prosecuted in that case.
The only aspect about the R2-million that the two sides agree on is that they discussed the possibility of using Palazzolo to engineer an illicit “round-tripping exercise” with the financial rand. But both Knight and Palazzolo claim they backed out of the plan because it was unlawful.
Palazzolo claimed his refusal to participate resulted in the breakdown of his business relationship with the two accused: “The evidence that I got is that in my opinion the breakdown of our relationship, the not honouring of this deal, has something to do with my refusal to participate in this, what I will qualify as a scam.”
The defence says in addition to the meetings during which Palazzolo and the prosecution say the business deal was discussed, Palazzolo also travelled to Pretoria to talk to his contacts in the police about the investigation into Medical Cash & Carry. Palazzolo denied this several times.
Max Hodes, SC, who is representing Schoeman, suggested Palazzolo had close links with several policemen, including General Neels Venter, former head of the police narcotics branch.
Palazzolo said he only knew Venter in his capacity as investigating officer in the trial of Peet du Pontes, the National Party MP convicted in 1991 of helping Palazzolo obtain his residence permit. Palazzolo testified in that case.
Advocate Cecile Zwiegelaar, who is representing Knight, said the R2-million was not paid to Palazzolo as a bribe, but just for information. “They did not expect you to do anything improper, to bribe or to assault or to threaten anybody,” Zwiegelaar said.
Knight and Schoeman will now be cross- examined on their claims that the money was paid to Palazzolo to help probe the police investigation.
It was recently reported that former president FW de Klerk presided over a Cabinet meeting in March 1993 that gave Palazzolo his residence permit while he was the subject of an Italian extradition warrant.
Both the accused are on legal aid. Knight is currently working at the Medicine Den in Randburg, which is run by former Medical Cash & Carry staff, and was recently the subject of a police raid for stolen drugs.