Publication: Business Day Date: 2004-10-22 Reporter: Tim Cohen

KPMG Report on Shaik Lifts Lid on Chaotic Zuma Finances



Business Day

Date 2004-10-22


Tim Cohen

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Durban - Evidence presented at the trial of Durban businessman Schabir Shaik yesterday indicated that Deputy President Jacob Zuma's personal finances were in an even worse state than previously suggested.

This evidence was presented as part of what promises to be a marathon stretch at the trial, as the court wades through a 260 page report compiled by auditing firm KPMG. The report constitutes conclusions drawn from thousands of pages of documents seized from Shaik's office and presented in court yesterday, filling 22 lever-arch files.

Only the first 70 pages of the report were presented in court yesterday by director of the forensic division Johannes van der Walt, who led the team that compiled the document. Earlier in the trial the state suggested Zuma's apparent inability to live within his means was a motivation for his and Shaik's attempt to coerce French arms company Thomson CSF to pay a bribe.

Shaik denies the charges.

Yesterday the extent of Zuma's parlous financial position was further elucidated, with Van der Walt saying a general pattern emerged indicating new debts were incurred at a time when he could not settle his existing debts with the means at his disposal.

"There were times when not even the first payment due cleared the bank," he said.

In the period during which Van der Walt studied the financial relationship between Shaik, Shaik's various companies and Zuma from 1996 to 2002 a total of R1,2m was paid to Zuma by Shaik and his companies.

"The manner in which these transactions were recorded indicate that none of those treated the payments as loans as has been contended," the report said.

The transfers apparently extended beyond 2002, said Van der Walt, who said he was aware Shaik had been described as Zuma's "financial adviser".

Yet it seemed Shaik was not so much an advise r in the proper sense as much as a person who settled Zuma's debts. Zuma's financial position had not improved after Shaik took over as the "adviser", Van der Walt said.

The report analysed the origins of Shaik's Nkobi group, including a suggestion Zuma was to be a founding shareholder .

Shaik's notebook, in which initial shareholding proportions were outlined, included a note that 2,5% was being set aside for "JZ" in one of the key companies in the group. Van der Walt said he believed "JZ" indicated Zuma.

The African National Congress (ANC) was apparently intended to be a founding shareholder in the group, according to the plan, and would hold 20% of shares.

Shaik ended up with majority shares in the main holding company in a proportion that fluctuated at about 60% of the total.

But Van der Walt referred to a document that suggested the company had paid dividends of about R2,26m to the ANC later in 1999, though it was not signed.

With acknowledgements to Tim Cohen and the Business Day.