Publication: Mail and Guardian Issued: Date: 2004-10-27 Reporter: Sapa

Mandela Money Used to Help Shaik, Zuma



Mail and Guardian

Date 2004-10-27



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A sum of R2-million that former president Nelson Mandela gave to Deputy President Jacob Zuma in October 2000 was used to pay the debts of Zuma and Schabir Shaik's Nkobi Holdings, the Durban High Court heard on Wednesday.

The state says Mandela's money was intended for the KwaZulu-Natal Reconstruction and Development Programme (RDP) Education Trust Fund.

The court also heard how money was later deposited into Mandela's account from an unknown source.

According to the findings of a forensic audit by Johan van der Walt of auditing firm KPMG, only R1-million was paid into the trust account for the benefit of the Jacob Zuma Education Trust, and was later transferred to an unknown beneficiary.

Shaik, who was Zuma's financial adviser at the time, then sent a fax to Absa with instructions to transfer R900 000 from Zuma's cheque account to a one-month fixed-deposit account.

This account was in the name of Floryn Investments, a Nkobi subsidiary.

Van der Walt told the court it is evident the money was later used to "reduce overdrawn bank balances" of Nkobi subsidiaries.

The remaining R100 000 in Zuma's account was then used to pay his debts.

At that stage, Zuma experienced huge financial problems -- especially regarding his Nkandla traditional-village project.

Not knowing that Shaik had used R900 000 from his account, he asked for a cheque of the same value to be handed to the Nkandla contractor.

Shaik, who thought the project had been stopped after advising Zuma against continuing with it because he would be paying too much, told the bank not to go ahead with the payment.

R1-million was transferred from the RDP account to an unknown account on October 25 2000, with the bank statement reading "settlement".

Van der Walt said that on January 5 2001, R1,4-million was transferred from one Mandela Nedbank account to another, and that a further cheque deposit of $300 000 was made into the same account.

"The source of these funds is not known," Van der Walt said.

He said the initial balance of R1,3-million was transferred out of that account on April 26 2001.

Meanwhile, Shaik's brother Mo has questioned why the state used Mandela's name in court, saying it alluded to irregularities in Mandela's source of income.

He said it was "part of the particularly venomous nature of this case".

National Prosecuting Authority spokesperson Sipho Ngwema said the state wanted to show "how the money was eventually used".

He said funds from Mandela to Zuma were "not for personal purposes", but for the RDP.

With acknowledgements to Sapa and the Mail & Guardian.