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LeisureNet execs go to jail

Published Apr 1, 2011


Peter Gardener and Rodney Mitchell, the former LeisureNet joint chief executives who were convicted of fraud in 2007, reported to Pollsmoor Prison on Thursday to start their seven-year sentences.

Nearly two weeks after a Supreme Court of Appeal judgment upheld their earlier conviction and sentencing, their attorney was formally notified on Wednesday that they had to start their jail terms.

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Jeremy Tyfield, the attorney for Mitchell and Gardener, confirmed that he had received documents from a registrar at the Cape High Court requesting that his clients report to prison.

According to the court system, a signed copy of the judgment has to be sent to the court where the matter was last heard, to implement the decision by the Supreme Court of Appeal.

However, the signed copy of the judgment took 10 days to arrive at the Cape Town High Court.

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The Western Cape’s regional head of justice, Hishaam Mohamed, said Mitchell and Gardener had reported to Pollsmoor at around noon on Thursday.

About the process, Mohamed said: “We have handled the procedure as we always have and it took place in the normal time frame.”

Before reporting to prison Mitchell and Gardener were still on bail of R500 000 each but this was officially retracted on Wednesday.

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They were convicted in the Cape High Court in 2007 of fraud amounting to R12 million. This was for their failure to disclose that they had bought shares in a German fitness company in 1999 to the value of R33m at the time.

LeisureNet, which owned the Health & Racquet gym franchise, Planet Hollywood restaurant and the Imax theatre in the V&A Waterfront, was liquidated in 2000 with liabilities amounting to R1.2 billion and assets valued at about R320m.

During an inquiry evidence implicated both executives in making secret profits at the expense of LeisureNet involving the transaction with the company Dalmore.

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The inquiry also revealed that Gardener and Mitchell were implicated in a number of frauds.

Evidence against Gardener showed that he used LeisureNet to commit VAT fraud and obtain a refund of over R450 000 on renovations he had carried out on his holiday home in Hermanus.

Various role-players testified in the case about the lavish lifestyles of Gardener and Mitchell, spoiling their families with expensive cars, top-notch home décor and dining at fancy restaurants, on the company’s tab.

Mitchell and Gardener were arrested by the Scorpions in 2002 and started their battle in the courts which has lasted for nearly a decade until they reached their final leg at the Supreme Court about two weeks ago.

The Cape High Court initially sentenced Gardener to 12 years with four years suspended and Mitchell to 12 years with five years suspended. The seven-year sentences imposed by the Supreme Court means Gardener will spend one year less in prison than he would have initially. - Cape Times

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