Almost two months before the start of Schabir Shaik's corruption and fraud trial in Durban, Deputy President Jacob Zuma sent Shaik a loan agreement document, which the defence claim will prove payments made to or on behalf of Zuma from Shaik and his Nkobi Holdings were indeed loans.

The document, which was faxed from Zuma's office on August 23, was on Thursday presented at court during the cross-examination of KPMG forensic director Johan van der Walt, who compiled a 250-page report that allegedly shows Shaik solicited an annual bribe of R500 000 from French arms company Thomson-CSF to Zuma in return for his influence and protection from investigations into the country's controversial arms deal.

The document outlines a R2 million revolving loan agreement between Shaik and Zuma, which was allegedly signed on May 16, 1999. The agreement was to run for five years.

According to defence advocate Francois van Zyl, an interest clause was added to the agreement after Zuma allegedly insisted on it.

The interest to be paid was at prime rate plus two percent.

In his plea explanation, Shaik cites his religion as the reason why he could not accept the interest. He told Zuma that as accepting interest on a loan is against Muslim beliefs, the interest would to go to charity.

Van Zyl on Thursday explained that when the document was faxed to Shaik in August, the five-year agreement period had expired, but his client has indicated that the loan agreement will stand until a new one is drawn up.

He said witnesses will testify that the agreement was faxed from Zuma's office and that it was originally filed "in the confidential section of declarations parliamentarians have to make".

Earlier Van Zyl questioned Van der Walt on the money Zuma paid back to Shaik.

Van der Walt, who last week told the court that there was no proof that Zuma repaid Shaik, on Thursday conceded that a total of R140 000 was repaid to Shaik.

He said Zuma signed three acknowledgments of debt for payments amounting to about R300 000.

The ANC came up when Van Zyl asked Van der Walt about a R150 000 debt that Shaik had allegedly settled with AQ holdings on behalf of the political party.

Van der Walt stood firmly behind his findings and told Van Zyl that the debt was paid on behalf of Zuma and not the ANC.

"I find it strange that if the debt was incurred on behalf of the ANC, why was Abdul Mangerah from AQ Holdings not looking at the ANC to recover funds, and why did the ANC not deem it necessary to pay it," he said.

When cross-examined on the "false" Zuma bank balance sheet presented to Absa bank by Shaik, who was acting as the deputy president's financial adviser, Van der Walt maintained that if the payments made to or on behalf of Zuma were loans this should have been reflected as a liability in the accounting records.

Van Zyl argues that the loan could have simply been omitted with similar liabilities such as a Nedbank overdraft of R114 431, the outstanding balance for a Mitsubishi Pajero, a Standard Bank overdraft of R113 241, and R195 557 owed to Standard Bank.

Van der Walt said although the state has not charged Shaik for allegedly producing a false balance sheet, Shaik, as Zuma's financial adviser must have been aware of his liabilities.

Van der Walt told the court, for the second time during his cross-examination, that he did not review all the documents on Shaik made available to him from Shaik's Nkobi Holdings premises.

When asked how many "Zuma files" he reviewed, Van der Walt's answer was the same as that given by Shaik's former PA Bianca Singh, who testified that Shaik kept two red files relating to Zuma in a cupboard at Nkobi Holdings.

Van Zyl said he found it strange, that as a forensic accountant Van der Walt only looked at two files, when police seized five files on Zuma from Nkobi Holdings.

Furthermore, he said, if Van der Walt had looked at those files he would have known that the Zuma payments were never a secret at Nkobi Holdings. Van Zyl said Nkobi accountant Colin Isaacs kept a record in the accounting books.

Van der Walt rejected this, saying that his report is more "comprehensive" as Isaacs allegedly left out many of the payments.

Van Zyl said the Zuma payments were not only known within Nkobi but also to companies and schools that Shaik paid on behalf of Zuma.

Van der Walt did not dispute this, but said the companies were probably "just happy to get their money".

With acknowledgements to Nivashni Nair and The Natal Witness.