Redknapp 'received offshore bungs'


Tottenham Hotspurs manager Harry Redknapp went on trial today accused of receiving "offshore bungs" from his former employer.

The 64-year-old - tipped as a future England boss - dodged taxes on “substantial payments” while he was in charge at Portsmouth, a jury heard.

Appearing in the dock, Redknapp stood accused of receiving two untaxed payments of more than £189,000 from former chairman Milan Mandaric, his co-accused. The court heard that the former West Ham boss allegedly flew to Monaco to set up a bank account in his dog Rosie’s name and that Mr Mandaric paid him bungs for transfers.

John Black QC opened the Crown’s case at Southwark Crown Court by telling jurors “both parties must have known” they were avoiding taxes. “These payments were a bung or offshore bonus that the parties had absolutely no intention of paying taxes for,” he said.

Redknapp’s “widespread popularity” was singled out by the prosecution. “He is currently enjoying what may be described as footballing success,” Mr Black said. “They (Tottenham) are currently riding high and are placed today as third in the league despite yesterday’s result.”

Redknapp, appearing behind bullet-proof glass alongside Mr Mandaric, read notes as Mr Black outlined how the manager received player transfer bonuses under a clause in his contract.

Mr Black focused on the purchase of striker Peter Crouch for £1,250,000 before he was sold for £4.5 million.

Redknapp and Mr Mandaric deny two counts of cheating the public revenue when he was manager of Portsmouth Football Club.

The first charge alleges that between April 1st, 2002 and November 28th, 2007, Mr Mandaric paid $145,000 (£93,100) into a bank account held by Redknapp in Monaco to avoid paying income tax and national insurance.

The second charge for the same offence relates to a sum of $150,000 (£96,300) allegedly paid by Mr Mandaric to the same account between May 1st, 2004 and November 28th, 2007.

Redknapp (64), who underwent minor heart surgery last year, is the most successful English manager in the modern game, having led Portsmouth to FA Cup success and Spurs to last season’s Uefa Champions League quarter-finals.

Mr Mandaric (73), from Serbia, is now chairman of Sheffield Wednesday, having previously worked at Leicester City.

Redknapp, of Panorama Drive, Poole, Dorset, is represented by John Kelsey-Fry QC, while Lord Macdonald QC is counsel for Mr Mandaric, of Stretton Hall, Oadby, Leicestershire.

Redknapp was described as a “hard-headed businessman” as the jury of eight men and four women were shown a string of documents and his signature.

Bonuses paid to Redknapp during his time at the club would total up to £500,000 depending on profits the club made on player transfers, Mr Black added.

“Harry Redknapp was, it goes without saying, no ordinary employee,” Mr Black said. “Talented and popular he might have been, the Crown say he was nevertheless a hard-headed businessman, with a financial acumen and pecuniary sense of his influence to his employers.”

Redknapp initially received 10 per cent of net profit made on player transfers made during his time as part of a clause in his contract, Mr Black said. “He had a highly lucrative employment contract,” he said. His contract later changed and it was reduced to 5 per cent, the barrister said.

He was paid about £100,000 when England striker Crouch left the south-coast club for Aston Villa in 2002, the court heard.

Redknapp never mentioned the Monaco account as he was investigated by HM Revenue and Customs officials over his transfer dealings at West Ham United, the court heard.

The inquiry, between January 2004 and October 2006, “was originally prompted by concerns over a £300,000 payment... regarding profit made in a player transfer, namely Rio Ferdinand,” Mr Black said.

The Monaco bank account eventually came to light during an inquiry into illicit payments in football, led by Lord Stevens, the former Metropolitan Police Commissioner.

The investigation, dubbed the Quest inquiry, was handed to the Premier League chief executive Richard Scudamore in July 2007.

In November the previous year, Redknapp had been interviewed as part of the investigation. “That was the first time anyone heard of a Monaco bank account,” the barrister said.

Redknapp first flew out to Monaco in April 2002 to set up the account, the prosecution claims. He named the HSBC account Rosie 47 - a reference to his dog’s name and the year of his birth.

“He flew to Monaco for the specific purpose of setting up a secret account, into which the off-the-record payments could be received,” Mr Black said.

Mr Black said the first time the British authorities knew of the Monaco account was in November 2006. “It’s significant, the Crown suggests, that the bank account opened by Redknapp was located in an offshore tax haven. The Crown suggests this was quite deliberate and was intended to obscure andto render less transparent the nature of the money payments.”

Having set up the account in Monaco, Redknapp was keen to ensure payments were promptly transferred in to the “tax haven”, Mr Black added. “The Crown say that Redknapp did not wait long before taking steps to ensure that he would receive what he regarded as his due off the record payment,” he said.

The case continues.