THE FORMER Portsmouth owner Milan Mandaric paid €110,000 into a Monaco bank account to do something “special” for his then manager, Harry Redknapp, as a “friend”, not as a bonus on Redknapp’s salary, Mandaric told a court yesterday.
Giving evidence for the first time in his and Redknapp’s trial on charges of failing to pay tax allegedly due on that and a further payment of €115,000, Mandaric said he paid the money to Redknapp as “an expansion of our togetherness, from being football people into friendship territory”.
Over two hours at Southwark crown court in which he was questioned by his own defending barrister, Ken Macdonald QC, Mandaric said he and Redknapp had grown close beyond their professional relationship at Portsmouth, whom Redknapp joined as director of football on August 29th, 2001, and then became manager of on May 27th, 2002.
The court heard Redknapp’s initial salary at Portsmouth, then in the Championship (called the First Division at the time) was €2.12 million a year. After Redknapp became the club’s manager on May 27th, 2002, a start which was backdated to March 18th, Redknapp’s salary at the club, still in the Championship, was increased to €3.6 million a year.
Following Portsmouth’s promotion to the Premier League in May 2003, which Mandaric described as “a dream for me”, Redknapp’s salary was increased in March 2004 by a further €1.4 million to approximately €5 million a year.
Mandaric said that quite quickly after Redknapp joined the club, until their relationship soured when the manager left for Southampton, they had become close family friends.
They used to go out for dinner, with Redknapp doing the driving, their wives became friends, the couples went on holiday in a group and they spent one New Year’s Eve together at a hotel in the New Forest. Mandaric would also go to Redknapp’s house to play with the dogs in his garden.
“We developed a friendship,” Mandaric said. “It is great to have a professional relationship in football and I always had this with managers.
“But I never had a friendship as I had with Harry. We expanded our friendship over and above football business. He was a special guy, he was a special manager but above all he was a special friend.”
Mandaric, now the owner of Sheffield Wednesday, and Redknapp, Tottenham Hotspur’s manager, are accused of two counts of cheating the public revenue. The prosecution alleges that the €225,000, paid into a Monaco bank account opened by Redknapp, €110,000 in May 2002 and €115,000 in April 2004, was in connection with Redknapp’s employment and as a reward for his services, and that PAYE tax and National Insurance should therefore have been paid on it.
Mandaric repeatedly denied the payments were due to Redknapp under his contract, as the manager’s bonus for the profit Portsmouth made when they sold the striker Peter Crouch to Aston Villa in March 2002.
He said Redknapp was contractually due five per cent of the profit Portsmouth made on Crouch – Redknapp was paid a €138,000 bonus, after tax – but not 10 per cent, for which Redknapp was asking.
While he refused to pay Redknapp the extra five per cent, Mandaric said that shortly after the sale of Crouch he decided “to do something special for Harry”, as a friend, and paid €110,000 into the Monaco account, to build Redknapp an “investment portfolio”. He said Redknapp had taken him horseracing, where Mandaric had won €600 on bets placed by Redknapp, so Mandaric wanted to show him how he made money on his own investments.
In his mind, Mandaric said, the €115,000 was “absolutely not” connected to Redknapp’s employment. “This was something entirely different,” he said.
“It was entirely my voluntary thing, without obligation, something I wanted to do special for my friend, an expansion of our togetherness, from being football people, into friendship territory.”
In April 2004, Mandaric paid the further €115,000 into the account, which Redknapp had named Rosie 47 after his dog and date of birth. This, Mandaric said, was because the investments made with the Monaco money had lost their value.
