Mandaric: Redknapp was on £4.2m at Portsmouth

The Tottenham manager, Harry Redknapp, had a contract worth £4.2m when he was in charge of Portsmouth from March 2004 to his departure nine months later, his former chairman, Milan Mandaric, told a court yesterday.

Details of Redknapp's final Portsmouth contract were revealed as Mandaric laid bare the relationship between the two men who took Portsmouth up from the Championship in 2003, forging a close friendship along the way, before they fell out in 2004 and Redknapp departed, later joining close rivals Southampton.

Mandaric took the stand for the first time at Southwark Crown Court where he, like Redknapp, faces two counts of cheating the revenue over two payments made to a Monaco bank account between 2002 and 2004. Born in Croatia but raised in Novi Sad in what is now Serbia before emigrating to America, Mandaric said at one point the two men were so close they celebrated 2002 New Year's Eve together with their wives.

"Overall, he [Redknapp] was a special guy in my book and a special manager," Mandaric told the court. "Above everything, he was a special friend and special manager." He also admitted that Redknapp would drive him "crazy" at times and likened him to a child he would have to "spank". Mandaric joked that at times the relationship with Redknapp would be one in which he wanted to "strangle him".

At the centre of the case are the payments of £93,000 and £96,000 Mandaric made to Redknapp's "Rosie47" Monaco account that the 73-year-old claims were the basis of an investment portfolio he established for his friend. The Crown contends they constitute a bonus on the profits made on the transfer of Peter Crouch to Aston Villa in March 2002, which was paid offshore to avoid tax. Mandaric told the court: "I felt I wanted to do something special for Harry and something no other people can do, something you cannot get in football business for no other reason than he meant more to me than any other football manager. He means to me a friend. It [the investment] was something I could do myself. I already had the infrastructure to do this."

A self-made billionaire, who made his fortune in Silicon Valley in the 1960s and 1970s, Mandaric has at different times owned a soccer franchise in America as well as Standard Liège, Nice, Portsmouth and Leicester City, and is now chairman of Sheffield Wednesday.

Mandaric said that he lost "more than $10m" the year that he established what he said was Redknapp's investment fund, the performance of which he said was "disastrous". Asked whether the funds deposited in "Rosie47" constituted a taxable bonus, Mandaric said: "Absolutely not, this was something entirely different."

Later he said that if he had wanted to pay Redknapp a bonus of £100,000, he could have done so. "For God's sake I had already spent £17m to support the club," Mandaric told the court. "I'm quite sure I could have come up with another £100,000."

Tottenham are not ruling out taking Redknapp by helicopter to Anfield on Monday for their league game against Liverpool. The case is due to run into a third week and is generally adjourned around 4pm daily.

Both men deny the charges. The case continues.

How Steve Jobs helped to make Mandaric

The former Portsmouth chairman Milan Mandaric had a remarkable rise from the poverty of Marshal Tito's Yugoslavia to become a contractor of Apple's Steve Jobs in California and establishing a business worth $1bn, the court heard yesterday. Giving evidence for the first time in his trial for tax evasion, Mandaric, 73, chronicled his rise from his father's garage in Novi Sad to establishing and selling Sanmina Corp, an electronics giant. He later went on to build and sell another £1bn company that employs some 40,000 people around the world.

With his engineering background, Mandaric, now the Sheffield Wednesday chairman, developed circuit boards that were bought by Apple, IBM, Hewlett-Packard and Siemens in the early boom years of Silicon Valley. "The one person who isn't around any more is Steve Jobs. He gave the biggest contract and that is why Sanmina got into other [manufacturing] components," Mandaric told Southwark Crown Court.