LONDON – Tottenham manager Harry Redknapp’s financial dealings were raked over in a London court on Tuesday as prosecutors laid out their case that he used a “secret” offshore bank account to stash $295,000 of transfer bonuses over a six-year period.
The trial comes as Redknapp is enjoying the most successful period of his coaching career and is a prime candidate to replace Fabio Capello as England manager later this year.
The 64-year-old Redknapp has been forced to swap the dugout for the dock to hear claims he kept cash in Monaco to avoid British taxes while he was manager at Portsmouth.
On the second day of the trial at Southwark Crown Court, the jury was told that Redknapp categorically denies receiving a “bung” — the term used in Britain to describe a bribe — from former Portsmouth chairman Milan Mandaric during their spell at the south-coast club.
“For the sake of … any amount of money, I don’t fiddle,” Redknapp said in part of a police interview read out by the prosecution. “I pay my tax.”
Redknapp had defended himself to a reporter with the now-defunct News of the World during a taped conversation read out in court
“How can it be a bung when the chairman of the football club paid me?” Redknapp said.
But the prosecution case is that the pair were trying to dodge paying income tax and national insurance. Mandaric is accused of paying $145,000 into Redknapp’s Monaco bank account in May 2002 — a bonus prompted by Peter Crouch’s sale from Portsmouth to Aston Villa — and another $150,000 two years later.
The 73-year-old Mandaric, who is now chairman at third-tier club Sheffield Wednesday, claims that he was providing tax free loans to Redknapp, prosecutor John Black said.
According to police interviews read out in court, Redknapp said he was assured by Mandaric that the tax on the money in Monaco had been paid and claimed that his boss at the time had control over the HSBC account.
Redknapp also claimed the investment made on his behalf by Mandaric turned out to be a “disaster.”
“It got wiped out,” Redknapp was quoted as telling police. “I thought that’s the end of that one, never mentioned it again … I just thought it’s history … he probably ain’t even put the money in.”
“If it was something dodgy I would have gone over there and brought it back in a brief case,” Redknapp also told the newspaper reporter.
Mandaric asked Redknapp to repay $145,000 in 2009 after previously providing a “no comment” response during police questions.
“This could be a transparent device by Mr. Mandaric to attempt to create an impression that the money… had only ever been advanced by way of a loan,” Black said.
Black cited Redknapp’s “supposed ignorance of the circumstances of the opening, operation and ownership” of the account, which Britain’s tax authority was only made aware of in 2008.
“Had Mr. Redknapp really forgotten that he had flown to Monaco to set up the account?” Black told the jury.
That disclosure to tax inspectors only came as a result of questions posed by a Premier League-led investigation into kickbacks and after Redknapp was arrested in November 2007.
The 64-year-old Redknapp managed Portsmouth, which is now in the second tier, between 2002 and 2004, and returned to Fratton Park in 2005 after a brief spell at its archrival Southampton before moving to Tottenham in 2008.
As the case was being heard Tuesday, Portsmouth’s future was at stake over unpaid taxes.
HM Revenue and Customs issued Portsmouth’s current owners with a threat to shut down the club unless they pay up 1.6 million pounds ($2.5 million) in taxes.
Rob Harris can be reached at www.Twitter.com/RobHarrisUK