The former joint chief executives of LeisureNet were on Tuesday found guilty on charges of fraud involving a total of R12-million.
However, Cape High Court acting judge Dirk Uijs found them not guilty on all the other charges they faced, including counts under the Prevention of Organised Crime Act and the Income Tax Act.
He found that the two men — Peter Gardener and Rod Mitchell — had unlawfully concealed their 20% interest in a German gym operation, Dalmore, when it was bought out by LeisureNet in 1999.
He said he was not impressed by the two men’s explanation that the failure to disclose was an inadvertent mistake.
”In simple terms gentlemen I do not believe your evidence in this regard,” Uijs said.
LeisureNet, which operated the Health and Racquet Club, was liquidated in December 2000 with massive debt.
However Uijs said he did not believe this fact alone was enough to justify a conviction on a charge of reckless trading. He said it was the full board of directors, and not just Gardener and Mitchell, who were doing business in the run-up to the collapse.
The matter is expected to be postponed for sentencing procedures and a possible application for confiscation of assets. – Sapa