Architect Dawid Rabie will give evidence in the Cape High Court on Wednesday as first witness called by the state in the LeisureNet trial, prosecutor Bruce Morrison announced on Tuesday.
Morrison was addressing the court after all four accused — former LeisureNet joint chief executives Peter Gardener and Rodney Mitchell, Mitchell’s wife Suzanne, and their business associate Hans Moser — entered pleas of not guilty.
Gardener and Mitchell face charges of fraud, money-laundering, income-tax evasion and contraventions of the Companies Act, involving some R16 million.
Moser and Mrs Mitchell face money-laundering charges only.
Rabie ran his own architectural firm, Keystone, but became LeisureNet’s in-house architect after Keystone was bought out by LeisureNet in 1999. The state alleges that Gardener and Mitchell made a deal with Rabie to line their own pockets out of the transaction.
Rabie was arrested in 2004, but charges were withdrawn because he was reportedly cooperating fully with the Scorpions.
In bulky explanations of their pleas, which were read out in full in court on Tuesday by their advocate, Francois van Zyl, Gardener and Mitchell admitted that Rabie transferred just over $127 000 to each of two companies they had registered in the British Virgin islands.
However, they said the money was Rabie’s income from LeisureNet under an agreement that he be paid for ”work in progress” Keystone had been doing overseas.
They said they allowed him to pay the money to their companies so that he could invest in properties they were developing in Australia and the United Kingdom, because he himself did not have an ”off-shore structure” for this purpose.
When LeisureNet was liquidated in late 2000, they repaid the money to Rabie, who, they understood, subsequently invested $200 000 in a project with Moser.
They denied making any misrepresentations ”directly or by omission” to the board or shareholders of LeisureNet, or that they had intended to defraud the company.
”The agreement concerning the work in progress was an agreement in the interests of LeisureNet … which would otherwise have had to pay substantially more for the work in progress than the amount eventually paid in terms of the agreement,” they said.
They also defended their role in LeisureNet’s purchase of a half share in Moser’s company Dalmore, where the state claims they pocketed some R7-million each.
They said their contracts with LeisureNet allowed them to give Moser their ”personal backing” in setting up health clubs in Germany, and it had been agreed they would each enjoy a 20% share in whatever the business produced.
They said though they did not disclose their interest in Dalmore to the LeisureNet board, this was not done with intent to defraud or prejudice the board or the LeisureNet group.
Earlier on Tuesday, acting Judge Dirk Uijs refused an application by Moser for his trial to be separated from that of the others.
Uijs said in his ruling he had considered the cost and inconvenience to the state and witnesses if the trials were separated, and the fact that Moser could renew the application later in the trial.
He also said it was important that the state be allowed within reason to place its cases before the court in the way it thought appropriate. — Sapa