Court Hears of Shaik's 'Creative Accounting'
It was another long day at the Schabir Shaik trial and the evidence about Shaik's alleged "creative accounting" even had Durban High Court Judge Hilary Squires a bit confused.
In the witness stand is KPMG forensic auditor Johan van der Walt, who is still wading through his 259-page report - the paper trail through which the state seeks to prove two charges of corruption and one charge of fraud against Shaik.
The corruption charges relate to an alleged corrupt relationship which Shaik had with the man he gave financial advice to, Deputy President Jacob Zuma.
On Wednesday, like on Tuesday, the fraud charge is under the spotlight. It is alleged that Shaik altered his accounting records to "write off" R1,282-million, part of which had been paid to Zuma. The state says the write-off was done under the guise of development costs for Prodiba - a consortium Shaik was involved in and which secured the contract for the supply of new credit card-type driver's licences.
In essence, the charge relates to bad accounting practices and to Van der Walt's assertions that Shaik's companies' financial statements had been deliberately misrepresented.
Regarding the Prodiba deal, Van der Walt said Shaik and Thomson-CSF each had a 33 percent stake in the consortium.
Not only did they stand to realise profit from Prodiba itself, but also from an allocated "workshare" and from interest on loans they made to Prodiba which would attract interest.
However, in terms of the contract, Prodiba had to supply card verification devices as well - and this put the profits in jeopardy. In an apparent double-deal, Shaik - wearing one of his Nkobi hats - had negotiated with Symbol Technologies, a United States supplier of the hand-held scanners, to buy a 25 percent stake in his company, Kobitech. He claimed to Symbol that he would "inject" a R150-million deal for the supply of 40 000 scanners.
"On the strength of this, Symbol was prepared to pay $2-million (about R12-million) for its shares. I can find no record that the board of Prodiba was aware that Shaik was negotiating with Symbol. Nor can I find any evidence of the contract with the Department of Transport referred to by Shaik as the 'R150-million contract'. In fact, at this stage, Prodiba was projecting substantial losses even if it had to supply just 500 of the verification devices," Van der Walt said.
The trial is continuing.
With acknowledgements to Tanya Broughton and the Cape Argus.