Shaik's R1.2m Lifeline to Zuma
Maclennan, Wendy Jasson da Costa,
Durban : There was no sign that Schabir Shaik's payments to Deputy President Jacob Zuma were loans, an audit has found.
"We could not find any evidence or indication of an intention of the Nkobi group and Shaik to recover such payment from Zuma," according to a 259-page audit report presented to the high court hearing corruption and fraud charges against Shaik.
Johan van der Walt, a forensic director at international auditing and accounting firm KPMG, presented the report on the audit, commissioned by the Scorpions detective unit.
Van der Walt said auditors had found R1.2 million in payments made to or on behalf of Zuma by Shaik and the Nkobi group between October 1995 and September 2002.
Van der Walt, who described himself to Justice Hilary Squires as a "bloodhound", said he had begun the forensic investigation, based on a National Prosecuting Authority strongroom full of documents, in September last year.
The report was accompanied by a 20-page addendum and 22 files that were stacked in the front of the court.
The report says Zuma's financial woes were apparent as early as January 1995 when he received a letter of demand from his banker about mortgage bond payments that were in arrears.
Van der Walt said an analysis showed the deputy president "could not settle the debts with the means at his disposal".
Giving an example, Van der Walt said that in 1997, Zuma could not pay the first instalment on a new Mercedes E320, priced at R305 000. Zuma had to pay a monthly instalment of R8 024.
There were times when legal proceedings were instituted against Zuma to recover debts.
"Shaik and the Nkobi group provided continuous financial support to Zuma."
Although auditors had been asked to investigate up to September 2002, they understood "this practice continued" after this date.
A good financial adviser would have told Zuma to stop incurring debt. "Shaik settled debts for Zuma. I found nothing to indicate that he gave him financial advice."
Van der Walt told the court that the Scorpions had given him a yellow notebook, seized from Shaik.
In it, Shaik had set out his plans for the share distribution of Nkobi Holdings and a note indicated that 2.5% of shares were to go to "J Zuma".
"There is no evidence that the shares were issued as planned," Van der Walt said.
He had found an unsigned document, purporting to be a letter dated in 1999, thanking Shaik for contributing R2.2m to ANC funds and a further R1m in dividends.
Van der Walt said no proof was found that this money had been donated.
Moreover, there were no funds available for distribution as dividends.
Shaik had presented himself to several institutions as Zuma's financial adviser and these institutions had communicated directly with him about Zuma's financial matters.
Zuma's financial position had not improved while Shaik was his financial adviser.
The audit report says: "It is evident from the information at our disposal that Zuma, in his personal capacity, did not have access to sufficient funds derived from his position as an official employed by the South African government, to fund his lifestyle. As a consequence (he) had to rely on funds from external sources, such as borrowing from financial institutions, Shaik, third parties and the Nkobi group."
Van der Walt said it was evident that Zuma "attended meetings and visits with individuals, representing the Nkobi group, on issues that were of interest to the Nkobi group".
This happened especially in relation to Nkobi's dealings with the Thomson group.
Nkobi also had financial problems. "At times, the Nkobi group exceeded its overdraft limits; the bank, due to insufficient funds being available, returned material numbers of cheques and debit orders."
The report said the group financed its operations mainly through overdrafts.
Zuma was in a similar position, the court heard.
Despite its position, the Nkobi group and Shaik continued to help Zuma financially.
The payments by Nkobi and Shaik to Zuma had a "direct correlation" with the group's overdraft, the report said.
Despite this, KPMG "could not find any evidence or indication of an intention" to recover these payments from Zuma.
Van der Walt spent several hours detailing the structure, shareholding and directorships of companies in the Nkobi group and other firms that featured in the Scorpions probe.
He had been instructed to conduct the investigation independently and to reach his findings independently.
On accepting the appointment, he had explained to prosecutor Billy Downer that he would prefer not to meet anyone who might be involved in the prosecution team until he had completed a substantial part of his work.
It was only later last year that he had met Downer again.
"This investigation goes much wider than conducting an audit."
With acknowledgements to Ben Maclennan, Wendy Jasson da Costa, Sapa and the Cape Times.