Publication: Sunday Times Issued: Date: 2004-10-31 Reporter: Paddy Harper

When Politics and Business Collide ­ or Collude



Sunday Times

Date 2004-10-31


Paddy Harper

Web Link


For the New Boys’ Club, political influence, and access to it, is more valuable than hard cash

Schabir Shaik’s corruption trial has provided a unique insight into the way business and politics can overlap.

The trial paints a picture of a world where political influence, and access to it, have greater material value than hard cash; where being politically well-connected outweighs assets.

In essence, it explains how the New Boys’ Club works ­ at least by Shaik’s rules ­ in post-apartheid South Africa.

Thabo Mbeki, Nelson Mandela, Jacob Zuma, Cyril Ramaphosa, Tokyo Sexwale and Thomas Nkobi are all past and present leaders of the ANC.

And all of them have been mentioned as forming part of the intricate web of corporate empire-building spun by Shaik and his Nkobi Group of companies ­ as described in the Durban High Court.

Name after name has come up as the state tries to prove that Shaik paid bribes to Zuma in return for his protection and patronage.

The politicians are not alone in their dealings ­ however remote or intimate ­ with Shaik. The dramatis personae (a list of people named in the prosecution’s forensic investigation) submitted to the Durban High Court, along with a 259-page forensic report, also includes top-flight business leaders from South Africa, Malaysia, France and Nigeria.

Mbeki, Mandela, Ramaphosa, Sexwale, Barbara Masekela (former SA ambassador to France) and former trade unionist Jayendra Naidoo were all named as having been involved either in meetings about Nkobi initiatives or in resolving disputes.

Late ANC treasurer Thomas Nkobi lent his name to Shaik’s group of companies after Shaik had worked with him.

Early witness evidence painted a picture of Shaik incessantly using Zuma’s name as a weapon in his business dealings.

When potential (and eventual) partner Thomson (now Thint) wanted cash from Shaik’s Nkobi group, it was allegedly given “connections”, in the form of Zuma, instead.

When the Malaysian giant Renong wanted to do business with black empowerment magnate Mzi Khumalo, rather than Shaik, at Durban’s Point Waterfront and Hilton Hotel, Shaik allegedly called in Zuma to negotiate on his behalf.

Renong was repeatedly told that only a Zuma-sanctioned partner would do. The result: the deal collapsed.

When the spoils in African Defence Systems (ADS), the consortium that eventually captured the corvette combat suite deal, were to be divided, Shaik was unwilling to take an equal 20% black empowerment share with a company called FBS.

According to a forensic report before court, a dispute arose over the proposed inclusion of FBS in the deal.

“The dispute ... between Mbeki, Zuma and Shaik might possibly have been about the inclusion of this new partner,” the report reads. It adds that, following a series of meetings to resolve the dispute, “there was involvement at a high political level by Mbeki and Mandela to assist and advise on the eventual structuring of the shareholding in ADS”.

The state claims Shaik later complained that Thomson was treating him like a “pawn” as its top officials were meeting a person “of a tendency opposite to his own within the ANC” ­ and threatened repercussions through his political connections.

“Shaik threatened to leave the company and said that he would do everything in his power to get [Pierre] Moynot [of Thomson] out of the country,” it adds.

The report concludes that Mandela and Mbeki were involved in “negotiations and discussions” right up until the day Cabinet announced the preferred bidders for the arms deal.

“However, it appears that their involvement was limited to attempts in resolving disputes regarding the black empowerment partner component.”

The names emerging in court include smaller fry, too.

KwaZulu-Natal Health MEC and ANC provincial deputy chairman Dr Zweli Mkhize is named as receiving 50 shares in Kobilec (one of Shaik’s companies) on November 30 1998.

An unsigned letter, purportedly from Mkhize to Shaik in May 1999, found during a Scorpions raid on the Nkobi offices, quotes Mkhize as thanking Shaik for “disbursements” of R2,26-million to the ANC in the province.

Bianca Singh, Shaik’s former secretary, spoke of a loan agreement for ANC KwaZulu-Natal secretary-general Sipho Gcabashe on behalf of the party.

As the trial continues, only some of these relationships ­ those that the court believes have relevance to the charges against Shaik ­ will be tested. As for the rest, a fleeting glimpse is all the world will get to see.

Dealmakers in the New South Africa

Thomas Nkobi
Ex-ANC Treasurer

Tokyo Sexwale
Ex-ANC Leader

Cyril Ramaphosa
Ex-ANC Leader

Jayendra Naidoo
Former Trade Unionist


Nelson Mandela
Former President of South Africa

Thabo Mbeki
President of South Africa


With acknowledgements to Paddy Harper and the Sunday Times.