Publication: Sunday Times Issued: Date: 2004-10-03 Reporter: Mzilikazi wa Afrika

How the Plot Thickened

 

Publication 

Sunday Times

Date 2004-10-03

Reporter

Mzilikazi wa Afrika

Web Link

www.sundaytimes.co.za

 

The Value of Friends

Schabir Shaik, below, allegedly gave Deputy President Jacob Zuma, above, more than R1.2-million

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These are the events, in chronological order, that form the basis of the state’s case that will be put before Judge Hillary Squires.

1994

In May 1994 Zuma was appointed MEC of Economic Affairs and Tourism in KwaZulu-Natal.

1995

In February 1995 Nkobi Holdings was formed by Schabir Shaik. Zuma is alleged to have been a secret shareholder from the outset. On October 1, Shaik started paying money to Zuma.

1996

In June 1996, Shaik told Nkobi directors that the government would be issuing tenders for corvettes. He boasted about his “political connections”.

Shaik was aware at the time that Zuma was destined to become the Deputy President in a post-Mandela government.

On June 4, Shaik wrote to the deputy chairman of the electronics company Altron, Peter Watt, about “defence and technology meetings”, saying he hoped the meetings he had set up with Zuma were beneficial.

Towards the end of 1996, Shaik arranged for Zuma to meet representatives of the Renong Group, which at the time was bidding for a stake in Durban’s Point Waterfront Development with empowerment partner Vulindlela, at Shaik’s luxury Durban penthouse.

1997

In June Zuma was appointed leader of government business in Parliament. His main task in this role was to bring investment to South Africa and to liaise with big business.

During October, Standard Bank acted against Michigan Investments, the close corporation through which Zuma had bought his home. The homeloan account had opened with a debt of R443 000.

In November, the boss of Thint (formerly known as Thales), Pierre Moynot, arranged for Thomson International boss Paul Perrier to meet Thabo Mbeki ­ then Deputy President ­ to lobby for the purchase of Thomson’s corvette combat system.

1998

On February 19, Zuma’s home loan was settled with a number of cheques.

On February 24, Thomson CSF France bought 50% of Altech Defence Systems, which later became ADS ­ African Defence Systems ­ of which Shaik was a director. On May 12, evaluation of the corvette bids started. Shaik tried to set up a meeting between Zuma and Perrier.

On May 14, Zuma’s Nedbank overdraft was R66 500 and his WesBank car debt was R291 145. He also owed the Perm Bank R750 00.

The next month, on June 9, Shaik, Perrier and Zuma met in London.

In September, Zuma’s Standard Bank account was R105 171 in overdraft.

On November 18, Thomson CSF France and Nkobi met to discuss the sale of 10% of Thomson’s share in ADS to Nkobi. The meeting was attended by Shaik, Moynot, Alain Thetard, boss of Thomson Holdings Southern Africa, Perrier and Zuma.

Zuma was there as “mediator” in a dispute about shares and to support the “promotion of empowerment ­ helping Nkobi to get shares in ADS”.

On October 7, Zuma owed a Stanger company, AQ Holdings, R86500. It threatened to sequestrate him. He was unable to pay, but Nkobi settled the debt.

1999

During 1999 Zuma was spending R37 000 a month more than his salary.

In January, Shaik and his associate, Deva Ponnoosami, tried to position Nkobi as a joint-venture partner for a tourism project in KwaZulu-Natal.

Shaik wrote two letters in Zuma’s name using the letterheads of the provincial Ministry of Economic Affairs and Tourism to a Scottish professor, John Lennon, who backed the project. Zuma blatantly punted Nkobi Holdings as a “local partner”.

On February 24, Shaik threatened to get Zuma to stop progress on the tourism project if Nkobi was not involved.

Four days later, an amount of R1.2-million was written off Nkobi’s books. Shaik could not explain where the money went.

On June 17, Zuma was appointed Deputy President.

Just three months later, on September 9, Patricia de Lille, then PAC Chief Whip in Parliament, claimed there was corruption related to the arms deal. The same day, the Presidency issued a statement denying that Zuma was involved in arms deal corruption.

On September 28, Defence Minister Mosiuoa Lekota approved the Auditor-General’s audit review of the procurement process.

On September 30, Thetard met Shaik in Durban. Nkobi sold shares to Thomson CSF France for R500 000.

Less than a month later, on October 22, Shaik requested a meeting with Perrier in Paris.

On October 27, Shaik wrote to a Kuwaiti businessman suggesting a meeting with Zuma who, he claimed, shared with him a “long-time economic goal of setting up an investment bank”.

This was to be called Nkobi Bank. The bank would compete for government and ministry budgets, as well as be a deposit-taker. It would focus particularly on the KwaZulu-Natal Ministry of Economic Affairs and Tourism.

On November 10, Thetard met Perrier in Paris. They discussed Zuma.

During November, Jeffrey Crane of a company called Crane Africa wrote to Shaik. In his letter he said: “It appears that Deputy President Zuma and Minister Mabuyakhulu will be at the opening function of the Kosi Mouth Campsite on December 10, which is adjacent to our building. [Mike Mabuyakhulu replaced Zuma as MEC for Tourism and Economic Affairs.]

“If it were possible for you to travel with them, it would be an ideal opportunity to show them our site,” Crane added.

At the time of the letter, Nkobi and Crane were involved in a joint venture attempting to obtain financing for various tourism initiatives.

2000

During 2000, Zuma was again short of money and was spending R29 000 a month more than he earned.

In February 2000 the media started raising questions about possible arms deal corruption.

On March 11 2000 a meeting was held in Durban between Thetard, Zuma and Shaik.

Thetard recorded the proceedings of the meeting in a letter handwritten in French that is now known as the encrypted fax. Thetard suggested in his letter that they should use a code for Zuma regarding the request for a bribe.

Thetard, in his letter, stated that Zuma requested R500 000 a year until the first payment of dividends by ADS.

The money was for the “protection of Thomson CSF during the current investigations [surrounding the corvettes] and permanent support of JZ [Jacob Zuma] for the future projects”.

Nkobi and Thomson’s partnership was at the time gearing up to bid for multimillion-rand government contracts such as the credit-card drivers’ licences, the building of the new Durban airport, new ID cards, the N3 and N4 toll road projects, a third cellular telephone network and other military contracts.

On March 31, Shaik invited the chairman of the United Bank for Africa, Hakim Belo-Osagie, to Nkobi’s Durban head office. In a letter to Belo-Osagie, Shaik said he wanted to introduce him to “our Deputy President Mr Jacob Zuma either in Pretoria or at his private residence in Durban during the weekend of 15/16 April”.

On April 7, Shaik wrote another letter offering the United Bank “opportunities” with Nkobi relating to the third cellphone licence, and suggesting a meeting with Zuma.

In July, work began on Zuma’s R1.4-million home in Nkandla, KwaZulu-Natal.

On August 31, Shaik faxed Thetard, complaining that the R500 000 meant for Zuma had not been “implemented”.

On October 5, Shaik wrote to Zuma asking him to organise a meeting with his British partner, Grant Scriven, and the late Safety and Security Minister, Steve Tshwete, on possibly setting up a fleet vehicle service for the police. Tshwete ignored the proposal.

The following day, Shaik wrote to Thetard again, stating: “My party is saying that we are reneging on an agreed understanding. He feels let down. I therefore urge you to respond timeously on this extremely delicate matter.”

It is alleged that the person who “feels let down” was Zuma.

On October 19, Shaik wrote to Eric Malengret, the contractor who was building Zuma’s Nkandla residence, asking him to stop work immediately.

Zuma told the builder to ignore Shaik and to continue with the project as he had arranged a bond. By this time nearly R200 000 had already been paid to Malengret by an unidentified “third party”.

On October 31, Durban tycoon Vivian Reddy paid R50 000 to Malengret towards the cost of Zuma’s home.

On November 1, Nkobi entered into a “service provider” agreement with Thales’s operation in Mauritius.

Nkobi’s annual fee for this Mauritian project was R1-million. Investigators found Nkobi did little to justify this fee.

Two days later, on November 3, another R50 000 was withdrawn from Reddy’s personal bank account and paid towards the building of Zuma’s home.

On November 7, Reddy opened a bank account in the name of a trust called Development Africa. He was the only signatory.

During December, arrangements were made for Zuma to meet Perrier and other Thomson bosses in Paris. It is not clear whether Zuma attended the meeting.

On December 4, Zuma made a R1-million cheque out to Development Africa. Three days later, Zuma’s cheque bounced.

The following day, on December 8, Shaik wrote to Thetard asking him to expedite payment of the Mauritian fee as “matters are becoming extremely urgent with my client”.

At this time, Zuma had accumulated debts of more than R1-million related to the building of his home.

2001

On January 19, Zuma wrote a letter in his capacity as “Leader of Government Business”, attacking Gavin Woods, the chairman of the Standing Committee on Parliamentary Accounts.

In the letter Zuma stated that there was no need for the Heath Investigative Unit to investigate corruption related to the arms deal.

He wrote that the executive was not prone to corruption.

On February 16, Thales Mauritius paid an initial R250 000 “service provider” fee into the Absa current account of Kobitech, another company of which Shaik is a director.

On February 24, Nkobi issued a cheque in favour of Development Africa for R250000. Nkobi also issued three post- dated cheques of R250 000 each in favour of Development Africa.

Together, the cheques amounted to R1-million ­ the amount of the alleged bribe agreed between Zuma, Shaik and Thomson.

On February 21, a Thomson senior manager, Jean-Daniel Chabas, met Shaik in Durban to discuss the loan repayments by means of dividends.

On March 22, Shaik made a reference to Zuma’s “bond saga” in his diary.

On March 28, Shaik’s diary revealed that he had attended a board meeting with Thomson and ADS before he flew to Cape Town for dinner with Perrier and Zuma.

During April, Zuma’s Nkandla development was completed but payments were not forthcoming.

On April 19, Nkobi’s financial accountant wrote to Absa, asking the bank to stop payment of the three R250 000 cheques.

On May 3, Shaik wrote to Tshwete complaining that the minister had failed to attend a meeting arranged through Zuma’s office.

Two months later, in July, Shaik arranged, through Zuma, for Scriven to be at a function attended by members of the Cabinet at which he received “bear hugs” from Zuma.

On August 23, Shaik drafted two letters to Thomson (alleged fakes), backdated to April and July that year, related to work apparently done.

He was at the time attending a Thomson board meeting in Mauritius to discuss the arms deal investigation.

By September the first ADS dividends were paid, nearly two years after the alleged bribe was requested. The amount due was R1-million.

On September 4, Shaik received a deposit of R175 000 from Kobitech.

The next day a cheque of R125 000 was drawn against Shaik’s account in favour of Development Africa.

Just 11 days later, on September 17, another cheque of R125 000 was drawn against Shaik’s account in favour of Development Africa.

Reddy had also made donations to the account.

2002

By September 30, Shaik had made payments of R1161562 to Zuma since October 1 1995.

In December 2002 Zuma settled the bulk of the Nkandla debts with a R900 000 loan from First National Bank loan. Reddy signed suretyship for R400 000.

2003

By January 2003 Reddy had begun paying Zuma’s R900 000 bond. On February 22, 2003 Zuma signed an “acknowledgement of indebtedness” with the builder Malengret. He still owed him R250 000.

With acknowledgements to Mzilikazi wa Afrika and the Sunday Times.