Publication: The Natal Witness Issued: Date: 2004-10-04 Reporter: Paul Kirk

The Low-Down on the Arms Deal



The Natal Witness

Date 2004-10-04


Paul Kirk


The phrase: “the trial of the century” has probably been used more times than are justified. But, in less than two weeks, a trial that is certainly going to be a biggie will kick off.

The accused will be Schabir Shaik and his companies – but on trial will be Jacob Zuma and every major business deal the state has signed since 1994. The Witness can reveal the trial will unveil claims that the ANC have hidden shareholdings in a company they have repeatedly awarded massive contracts involving public funds.

The state hopes to finish their case in around two months. By that stage they aim to have led enough evidence to convict Schabir Shaik, the cigar puffing Durban businessman. But, even if they don’t get that right, they will almost certainly have left Jacob Zuma’s reputation in utter ruins.

The Scorpions have a list of 105 witnesses they intend calling during their case. And from the very first witness things get bad for Zuma.

Witness number one is the owner of an extremely expensive clothing boutique in Durban where Zuma gets his threads – and where Shaik, the Scorpions allege, picks up the bill. Also on the list of witnesses is an official from the private school Zuma’s children attend – and where Shaik, once again, is alleged to pick up the bill.

The list includes financial experts, Armscor and Department of Defence officials as well as the man who built Jacob Zuma’s R1,3m rural village for his extended family.

In addition to the witness list, the Witness has obtained a complete copy of the charge sheet. If nothing else the document makes one wonder why Zuma is not keeping his financial advisor company in the dock.

“Corruption is a two way crime,” says Doctor Andre Thomashauzen, a senior German barrister and head of the Department of International Law at Unisa: “If the court finds one person guilty of being the corruptor it would generally follow that the person he corrupted is also guilty.”

But the only person in the dock is Shaik – the alleged corruptor.

The charge sheet accuses Shaik, and his various companies, of corruption and fraud - and also includes alternative, somewhat more technical, charges under the Companies Act as well as accusations of money laundering and the acquisition of the proceeds of unlawful activities. The offences are alleged to have been committed in order to enrich Zuma and with the aim of acquiring support from Zuma.

Accused ten in the charge sheet is a company called Floryn Investments. According to the charge sheet Schabir Shaik has claimed he holds all the shares in Floryn on behalf of the African National Congress.

Floryn owns 10 percent of Shaik’s Nkobi Holdings – which means the ANC are direct financial beneficiaries of the enormously contentious arms deal they signed. Nkobi Holdings have benefited from the new credit card driver's licence, from the N3 Toll Road Concession and the third cellular phone licence. Party political funding appears to have been obtained through spending public funds.

On page 9 of the charge sheet things get really nasty for Zuma. The charge sheet, after explaining how Zuma was a member of the KZN legislature until 1999, reads: “In terms of Section 136 of the Constitution of the Republic of South Africa, Zuma as a member of the Executive Council of a province may not have:

” The papers go on to point out the same laws applied to him when Zuma became Deputy President. The charge sheet then explains how Zuma has financially benefited from Shaik – contrary to the provisions of the law.

In previous interviews with the media Shaik has attempted to explain his payments to Zuma away as loans. The charge sheet, written by investigators who obtained his financial records using search warrants, rubbishes this claim.

“On 28 February 1999 an amount of R128 027,63 was irregularly written off in the Nkobi accounting records [Kobifin (Pty) Ltd] under the description of development costs of Prodiba (another Shaik company). This included an amount that was paid to Zuma.”

Clearly, had the payments been legitimate loans, there would have been no need to conceal them in the company accounts.

The record continues:

“The payments to Zuma make no legitimate business sense in that neither accused 1 (Shaik) nor the Nkobi group could afford the payments, being at all times in a cash starved situation relying on, and at times exceeding, bank overdrafts and thus effectively borrowing money from banks at the prevailing interest rates to make the said payments interest free. On the other hand, the group's survival depended upon obtaining profitable new business, inter alia, with the assistance of Zuma.”

“The payments made to Zuma, who would not otherwise have been able to meet his liabilities and fund his excessive expenditure, were corruptly made in furtherance of an ongoing scheme to influence Zuma to use his office or position to advance the accused private business interests and/or reward Zuma."

"Accused 1 made it clear that Nkobi's role in joint ventures with other partners was to provide political connections (as opposed to financial backing or technical expertise) and everybody understood that the political connection was so strong from accused 1’s side that there was no need for Nkobi to provide the money or the expertise. Accused 1 accords specific prominence to his relationship with Zuma in promotional material relating to the Nkobi Group.”

Despite the claims made in the charge sheet, no charges have been brought against Zuma.

The charge sheet then mentions how Zuma wrote an especially vitriolic open letter to Gavin Woods and made certain Judge Willem Heath never got to probe the arms deal – as Woods has asked.

One of the witnesses who may have a smug grin at the trial will be witness 104 – Dr Gavin Woods. After years of being attacked in parliament he may now get his turn to give evidence in court against Zuma.

Exactly what evidence Woods and the other witnesses will lead is not clear – but whatever it is it's not likely to do Zuma any favours.

With acknowledgement to Paul Kirk and The Natal Witness.