Milne misled us – Porritt

Moneyweb

Despite repeated invitations from presiding judge Brian Spilg, Tigon-accused Gary Porritt has so far failed to present his version of events during his cross-examination of the state’s first witness, convicted fraudster Jack Milne.

Porritt and Sue Bennett are on trial over 3 000 charges of fraud, racketeering and Companies Act, Stock Exchanges Control Act and Income Tax Act contraventions.

The charges relate to the collapse in 2002 of JSE-listed financial services group Tigon, of which Porritt was CEO and Bennett a director. They are representing themselves.

Porritt, who has been in custody for more than a year after contravening his bail conditions, is cross-examining Milne, the former CEO of Progressive Systems College (PSC), a company Tigon offered to buy.

Milne earlier testified that he, Porritt and Bennett conspired to defraud investors when they established the Progressive Systems College Guaranteed Growth (PSCGG) investment fund underwritten by Tigon. In his testimony, he told the court how they concocted the prospectus that led investors to believe he would invest their money in a diversified portfolio. In fact, Porritt made the investments and only in Tigon and its subsidiary, Shawcell.

Milne earlier reached a plea and sentence agreement with the state and served a jail term for his role. Porritt and Bennett deny any wrongdoing.

During cross-examination earlier, Porritt alleged Milne misrepresented PSC’s value to Tigon. He said Tigon offered to buy PSC for R15 million as it had earnings of R2 million, according to Milne. The numbers provided to Tigon during the due diligence, however, showed a R47 000 loss. Milne said PSC’s books were a mess and he was under the impression the earnings were R2 million at the time.

Milne said Porritt’s aim was not really to buy PSC; he wanted Milne in person whose reputation as an investment guru which would lend credibility to the investment scheme Porritt was cooking up, Milne implied. Spilg said the court would accept that Milne misled Tigon about PSC’s value.