The first witness in the long-awaited criminal trial of Tigon kingpins Gary Porritt and Sue Bennett on Monday admitted that he, together with the two accused, committed deliberate fraud by making misrepresentations in a company prospectus.
Jack Milne, former MD of Progressive Systems College (PSC) that taught members of the public to manage their own share portfolios, earlier pleaded guilty and served eleven months of an effective five year sentence relating to the collapse of Progressive Systems College Guaranteed Growth Limited (PSCGG). PSCGG was an investment fund underwritten by Tigon, a listed financial services company of which Porritt was CEO.
Porritt’s associate Bennett was also a director of PSCGG, which was established in 2000. The accused were arrested in 2002 and 2003 respectively and managed to delay the trial for a decade from their first appearance in 2006.
Milne’s admission came shortly after Bennett early on Monday morning brought an application for the court to investigate the authenticity of a copy of the plea agreement Milne entered into before he was sentenced. Both Porritt and Bennett are unrepresented by legal counsel.
The state earlier presented a copy of the document, since the original could not be obtained from the court file relating to Milne’s case. This was Milne’s personal copy that he made available, but one of the pages and the four attachments were missing.
Bennett on Monday alleged that the document was a forgery and cast doubt on the authenticity of the signatures. She suggested the court issue subpoenas for witnesses to testify about the authenticity of the document.
Porritt supported the application and added “it goes further” and is in fact “collusive fraud by prosecutors in two courts” perpetrated against him and Bennett. He reminded judge Brian Spilg of his undertaking to protect their fair trial rights. “I don’t believe we can have a fair trial. It is improper to continue one step further before my lord has studied the application and heard the prosecutor on it”, he said.
Spilg said there is no basis in law to stop evidence in chief on the basis of something that might or might not be wrong. The document might even prove to be totally irrelevant, he said.
As Porritt tried to object, Spilg told him: “This is not a show.” He said Porritt might have seen how trials are conducted elsewhere, like in the US, but that is not what happens in his court.
He said Porritt and Bennett may cross-examine the witness later about the document and gave Porritt until 10:00 on Tuesday to bring an application if he had anything substantial to add to Bennett’s application. “I am not having this trial delayed by oral representations about how this trial should or should not be conducted”, he said.
In his testimony that followed Milne pointed out several misrepresentations in the PSCGG prospectus aimed at encouraging members of the public to buy shares in the company.
He testified that representations that a team under his leadership would invest money raised from investors, using the method promoted by him and taught by PSC over a period of years by among other things investing in a diverse portfolio, were false.
In actual fact from before the prospectus was produced they planned on transferring the money raised by selling the shares in PSCGG immediately to EBN Trading’s account, which was under Porritt’s direct control. Porritt was de facto in control of PSCGG and took the investment decisions. Neither that nor the fact that they planned to invest in only two listed entities, both under Porritt’s direct control, was disclosed in the prospectus, Milne testified.
He expanded on the basis upon which he implicated Bennett by saying she was a director of PSCGG, was closely involved in the production of the prospectus and was a signatory to it. “Nothing went into the prospectus that she wasn’t aware of or didn’t approve of”, he said.
Milne testified that the shares issued had “almost no voting power”. They were N-shares and a million of these shares would have the same voting power as one of the 700 issued ordinary shares.
Milne acknowledged that the directors, including himself, individually and collectively accept responsibility for the correctness and completeness of the information contained in the prospectus. He further acknowledged that the information was neither correct nor complete and this was as a result of a deliberate effort to defraud.
He explained that the prospectus expressly stated that the details of PSCGG’s investment portfolio and strategic direction would at all times be kept strictly confidential. This, he said was aimed at concealing the real plan to invest only in Tigon and Porritt’s other company, Shawcell.
Shortly before the court adjourned for the day the state announced that Milne over the weekend found the missing pages of his copy of his plea agreement as well as the annexures to it. Porritt and Bennett agreed to it being admitted as evidence.
Milne was released from the witness stand until 17 October. On Tuesday the court will not hear any witness, as the state will submit documents. The trial will on Tuesday be postponed until 17 October and it is expected that the accused’s bail would be extended accordingly.
-Brought to you by Moneyweb
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