(Adds courtroom exchange with police officer in second paragraph, quotes in fifth and sixth paragraphs.)
Feb. 1 (Bloomberg) -- Tottenham manager Harry Redknapp denied cheating on his U.K. taxes, telling a London court that speeding fines were as close as he has come to breaking the law.
The coach, who watched his team beat Wigan 3-1 last night, is accused of working with his co-defendant, Sheffield Wednesday owner Milan Mandaric, to evade U.K. taxes when they were at Portsmouth soccer club. Redknapp took the stand today for the first time, and stopped his testimony to accuse a police detective of starring at him “to cause me trouble.”
Redknapp, 64, is fighting charges that Mandaric paid $295,000 into a secret Monaco bank account named after the manager’s dog Rosie to avoid paying income tax. Redknapp is the favorite to replace England manager Fabio Capello after this summer’s European Championships.
“I’ve always paid my tax,” Redknapp said. “I’ve always gone to the best available people. I’ve employed the best firm of accountants. I have always paid too much tax rather than not enough.”
Redknapp’s trial is in its second week. This afternoon, he accused detective Dave Manley, who led the investigation, of trying to unsettle him on the stand.
“Mr. Manley, can you stop starring at me,” Redknapp said, pointing a finger at Manley, who sat behind prosecutor John Black. “I know you’re trying to cause me a problem.”
Mandaric, 73, appointed Redknapp as director of football at Portsmouth in 2001, before giving him the manager’s job a year later. Redknapp said Mandaric hired him within an hour of their first meeting. Prosecutors allege the money paid to Redknapp was related to performance and player sale bonuses. Mandaric says it was a gift unrelated to soccer, to solidify his friendship with Redknapp.
Prosecutor John Black described Redknapp as a talented manager who was also a “hard-headed businessman with considerable acumen” who knew his worth. Redknapp had a contract giving him 10 percent of profits from player sales when he was director of football at Portsmouth in 2001, and that figure dropped to 5 percent when he was named manager a year later.
“There was nobody I enjoyed being with more than Milan,” Redknapp told the jury at Southwark Crown in London. “We also had our ups and downs. I was a bit volatile perhaps. There’s no one else I’d rather go to dinner with even now. I love his company.”
Redknapp got 115,473 pounds ($152,000) from the 4.5 million-pound sale of England striker Peter Crouch to Aston Villa. Crouch had joined Portsmouth from Queens Park Rangers for 1.25 million pounds in March 2002 before leaving nine months later.
Redknapp told police in interviews that the money in Monaco was what he was owed for Crouch. He told the jury today that he wasn’t contractually owed the money but was “morally due” the payment.
Wearing a black suit, sweater and black tortoise shell glasses, Redknapp raised his voice several times. He told Black the bank account wouldn’t have come to police attention had he not volunteered information to Quest Ltd., private investigators working for the Premier League to uncover corrupt payments in 2006.
“Wouldn’t I close the account if I had anything to worry about? ” Redknapp said. “Why do I go along and tell Quest?”
Prosecutors claim the offshore account was opened to funnel bonus payments from a player trade and performances, to Redknapp without paying U.K. employment taxes. Mandaric claimed the money was outside of his and Redknapp’s soccer relationship, and he saw it as “seed capital” with which he could invest in U.S. stocks on Redknapp’s behalf and solidify the pair’s friendship.
Redknapp described some failed business investments before Black asked him about why he signed a letter authorizing the transfer of the $100,000 to the U.S. account. Redknapp said he would’ve signed the document without looking at it, saying he was more concerned with preparing Portsmouth for an F.A. Cup game against Manchester United the next day.
“I was probably thinking more about marking David Beckham than signing that form,” Redknapp said.
Mandaric finished giving evidence earlier, saying he’d done nothing wrong.
“I don’t know what else I can do to convince you,” he said as Black claimed the money was and always had been related to Redknapp’s employment at Portsmouth. “I don’t have the best memory in the world but I tell the truth.”
Michael Tomana, chief executive officer of Pittsburgh-based technology investment company Redleaf Group, appeared as character witness for Mandaric, as did David Horne, a Lord Mayor of Portsmouth.
Mandaric “is a man of uncommon intelligence, integrity, high moral character and is a good family guy,” said Tomana, who said he’d known the businessman since 2000.
Redknapp was Portsmouth manager from 2002 to 2004 and then again from 2005 to 2008, leading Pompey to the F.A. Cup title in his final full season. He left to take over at Tottenham in October 2008 and guided the north London team to the Champions League in 2010.
--Editors: Christopher Elser, Anthony Aarons
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