Former LeisureNet joint chief executives Peter Gardener and Rod Mitchell should not be sacrificed on ”the altar of deterrence”, their advocate, Francois van Zyl, told the Cape High Court on Wednesday.
He was responding to a comment by acting Judge Dirk Uijs, who last month found them guilty of fraud involving a total of R12-million, that there had been a public outcry over white-collar crime.
Uijs, who is hearing submissions on sentencing, said that in his budget speech Finance Minister Trevor Manuel had alluded to the fact that white-collar crime was causing South Africa enormous economic losses and had to be stamped out.
He asked Van Zyl to comment on the proposition that one of the reasons for imposing a particular sentence might be to deter others from committing crime.
Though he had never been a believer in ”the deterrent option”, and he knew one should not choose a case at random as a deterrent, it was true that South Africans were becoming ”a little bit tired” of white-collar crime, Uijs said.
”R6-million worth of fraud is heavy duty crime, isn’t it?” he asked. ”That’s a big one.”
Van Zyl questioned what the real costs to the country were of white-collar crime, saying they might be inflated for effect.
He was not denying that there was an outcry, but the courts had been saying since the 1970s that the phenomenon needed to be stamped out.
What Gardener and Mitchell had been convicted of was white-collar crime, but the court should not ”sacrifice the accused on the altar of deterrence”.
Given the trauma that the two men and their families had already been through, a suitable sentence would be one of correctional supervision coupled to a suspended sentence and a substantial fine.
Van Zyl also argued that they should not be dealt with under minimum-sentencing legislation, which sets a minimum 15 years in jail for fraud involving more than R500 000 unless a judge finds ”substantial and compelling circumstances” to do otherwise.
Van Zyl said the court had to question the meaning given to the word ”involving” in the law.
The fact that Gardener and Mitchell made R6-million each from their undisclosed interest in a German gym operation that LeisureNet bought out did not mean that LeisureNet itself suffered prejudice of that amount.
”This is not a situation where the company was defrauded of R6-million. Not at all,” he said.
Uijs said Van Zyl’s submissions were ”fascinating as an academic exercise” but he was not prepared to stick his neck out at this stage on whether he agreed.
When Van Zyl said he should bear in mind the Companies Act sanctioned a year in jail or a fine for directors’ non-disclosure of interests in contracts, Uijs said the Act’s penalties were ”mickey mouse” sentences.
”I would suggest it’s time that somebody looked at that,” he said.
The two are to be sentenced on Monday — Sapa