Tottenham’s Redknapp Quizzed by Defunct Tabloid Amid Probe of U.K. Taxes

Tottenham Hotspur manager Harry Redknapp denied dodging taxes when asked by News of the World after the now-defunct tabloid learned of an investigation into the soccer coach and Sheffield Wednesday owner Milan Mandaric, according to transcripts read at the men’s tax evasion trial.

A sports reporter at the newspaper asked Redknapp about the police investigation into alleged tax evasion over $295,000 paid into a Monaco account named for Redknapp’s dog, Rosie, when he worked at Portsmouth, then owned by Mandaric.

“There ain’t nothing crooked in it,” Redknapp said to sports reporter Rob Beasley, according to a transcript prosecutor John Black read to the London jury today. Redknapp said he would sue the newspaper if it ran anything damaging, according to the transcript.

Redknapp, 64, managed Portsmouth from 2002 to 2004 and again from 2005 to 2008, leading the team to the F.A. Cup title in his final season. He left for Tottenham in October 2008, guiding the north London team to the Champions League in 2010, and is a favorite to replace England national team coach Fabio Capello when he steps down this year. Black called Redknapp a talented manager and “hard-headed businessman with considerable acumen” at the opening of the trial yesterday.

The court heard Beasley’s questions about the police investigation without being told how the reporter obtained the information nine months before the men were charged in January 2010. News Corp. closed its News of the World tabloid closed last year after reports its staff hacked telephones for stories.

Gift or Bonus

Redknapp and Mandaric gave Beasley different reasons for why the offshore bank account was opened in 2002, Black said on the trial’s second day. Mandaric told Beasley the payment was a gift to his friend Redknapp unrelated to soccer, then later told police it was a loan. Redknapp said to Beasley it was a bonus for making a profit selling Peter Crouch to Aston Villa in 2002. Redknapp told Beasley he didn’t know why Mandaric would say otherwise, according to the transcript.

As Portsmouth’s director, Redknapp got 10 percent of profits from the sale of players in 2001 and 5 percent when he became manager a year later, Black said, citing bank and contract records. He made about 115,500 pounds ($180,000) from Crouch’s 4.5 million-pound sale to Aston Villa. Redknapp flew to Monaco and opened the bank account at Mandaric’s suggestion, according to transcripts of interviews with the police and the tabloid. Redknapp said he felt he was owed more on the striker’s sale because it was signed before his contract terms had changed.

‘I Don’t Fiddle’

Redknapp told the police, three months after Beasley asked him, that he’d done nothing wrong and that Mandaric told him the tax had been paid, according to the police transcript. He said he opened it in Monaco because Mandaric said he could only transfer the money there from his U.S.-based account.

“For the sake of that amount money I don’t fiddle, I don’t fiddle anybody,” Redknapp said in his June 2009 interview with the City of London Police. “I pay my taxes.”

Mandaric, 73, refused to comment to police when questioned on June 8, 2009. About a month later his lawyer wrote to Redknapp’s attorney saying, “Milan Mandaric requests $145,000 is repaid by Harry as soon as he’s able to repay it,” Black said, reading out the letter.

The letter was “a transparent device” to make the money in account appear to have ’’only ever been advanced by way of a loan,’’ Black said. “Certainly Mr. Redknapp doesn’t seem inclined to repay the loan.” Redknapp had arranged for the $207,000 balance to be transferred to London when the account was closed in 2008.

Redknapp wanted the extra 5 percent on Couch’s transfer because it brought in a good fee even though Mandaric thought he wasn’t a good player, according to the police file Redknapp read.

‘They Owed Me’

“I was adamant that they owed me the money because when I signed Crouch Milan kept saying he’s useless,” Redknapp said.

Exchanges between Redknapp’s accountant, his HSBC Bank Plc relationship manager, Mandaric and Portsmouth executives showed Redknapp took 4 1/2 years to tell his accountant about the account as he thought it was “dead,” and 6 years to report the payment to the tax authorities, Black said to the jury.

“Had Mr. Redknapp really forgotten that he’d flown to Monaco to set up his account?” Black said.

An inquiry by the Premier League into possible irregularities in player trades uncovered the account in 2006. Redknapp told those investigators Mandaric opened it for him. During the account’s life, about $100,000 was transferred to a bank in Miami.

“If there was anything funny about that I would have gone over there and brought it back in a briefcase,” Redknapp told Beasley, according to the transcript.

To contact the reporter on this story: Tariq Panja in London at tpanja@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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