NEWS:MILAN MANDARIC said that he risked sounding "like a broken record" as he repeatedly maintained that he had paid €110,000 into a Monaco bank account for Harry Redknapp to invest, "to do something special for a friend", not as part of Redknapp's employment.

Giving evidence for the second day at Southwark crown court in his and Redknapp’s trial on two charges of cheating the public revenue, Mandaric, the former owner of Portsmouth Football Club, denied that he had paid the money to Monaco because Redknapp, then his manager, was arguing for a 10 per cent, not 5 per cent, bonus on Portsmouth’s profitable sale of Peter Crouch to Aston Villa at the end of March 2002.

As the club’s director of football, from June 25th, 2001, Redknapp was entitled to a 10 per cent bonus on the profit Portsmouth made when players were sold.

Crouch was sold for €5.4 million, a profit of more than €3.6 million, but Redknapp had just agreed a new contract, beginning on March 18th, 2002, to become the club’s manager.

The new contract, Mandaric explained, increased Redknapp’s salary by €1.4 million over its course, but the bonus on profits for the sale of players was reduced to 5 per cent, because that was more “appropriate” for a manager.

After Crouch was sold, Portsmouth paid Redknapp a bonus of €139,000, representing 5 per cent of the net profit, with PAYE tax and national insurance deducted.

Mandaric acknowledged that Redknapp had been unhappy with this and asked for 10 per cent, particularly because when Portsmouth had originally signed Crouch, Mandaric had not rated the “big tall guy” and had joked that Redknapp would end up paying him money.

Mandaric said that he had refused to pay the extra 5 per cent, and told Redknapp he should be happy with his new improved contract.

Then, on April 26th, 2002, four days after the €139,000 was paid by Portsmouth, Redknapp went to Monaco on Mandaric’s suggestion and personal recommendation to open the bank account, Rosie 47.

The prosecuting barrister, John Black QC, cross-examining Mandaric, pointed out that Redknapp did not actually sign his new contract, which came into effect on March 18th, 2002, until May 27th, 2002.

The following day, May 28th, 2002, Mandaric paid the €110,000 into the new account which Redknapp had opened in Monaco; the money was credited to the account on June 4th, 2002.

Mandaric denied repeatedly there was any “correlation” between Redknapp’s employment at Portsmouth and the payment to the Monaco account.

Mandaric said it was “seed money”, which Redknapp would eventually repay to him after their investments made a profit.

The prosecution alleges that the payment, and a further €115,000 paid by Mandaric to the Monaco account in 2004, was in connection with Redknapp’s employment, and therefore the PAYE and national insurance were unlawfully evaded.

Mandaric and Redknapp both deny the charges.

“It is so sad and unfair to me, and an insult to my family, my associates, and to some of the thousands of my supporters who know the chairman and what a kind person he is,” said Mandaric of the charge that he evaded taxes.

“I did not know what the word means.”

He said that over six years his companies paid a total of €66 million in taxes, and last year he bought Sheffield Wednesday 24 hours before they were certain to go into administration, which meant he paid that club’s €2 million taxes bill, and all the small creditors owed money, in full.

Redknapp, now Tottenham Hotspur’s manager, spent football’s transfer deadline day listening from the dock as his former chairman gave his account of the money transfers.

The trial continues.

Guardian Service