No Evidence for Shaik's Claims, says 'Bloodhound'
Auditor: 'We can trace first payments to Deputy President Jacob Zuma'
Auditors could find no proof of Durban businessman Schabir Shaik's claims to investors and government officials that his fledgling company owned majority shares in South Africa's arms industry a forensic auditor told the Durban High Court.
As week two of Shaik's trial on charges of corruption and fraud concluded in Court A, forensic auditor Johan van der Walt said they could trace the first payments made to Deputy President Jacob Zuma back to when Nkobi first involved him in their quest for government contracts.*
The state firstly alleges that Shaik made R1.2 million in payments to deputy president Jacob Zuma in exchange for Zuma's loyalty to Nkobi Holdings and the use of his name.
This, the leader of the prosecution Billy Downer SC, said in his opening remarks would be a pivotal part of the "backdoor" process followed to obtain lucrative contracts.** He added that the payments made no business sense as Nkobi was often in a "cash-starved" position.
Secondly, the state alleges that Shaik was involved in the fraudulent "writing-off" of amounts "loaned" to Zuma in Nkobi's books.
The other charge of corruption against Shaik relates to an allegation by the State that Shaik was involved in procuring a R1m bribe for Zuma from French arms company Thint.
In his plea explanation Shaik admitted the bulk of the payments, but said it was an effort to help a close friend. He admitted the writing-off of some of the Zuma loans, but said this was done in error and later rectified. He further denied attempts to solicit a bribe for Zuma.
On Thursday judge Hilary Squires asked Van der Walt if auditors were watchdogs. "Yes, but I am a bloodhound," he said.
Yesterday morning the forensic bloodhound encountered the real thing at court after the day-to-day police searches of the courtroom were extended because the snifferdogs smelled something "suspicious".
Court was scheduled to start at 9.30am yesterday but was delayed with about 20 minutes while electronic sweeps were done at court, National Prosecuting Authority spokesperson Sipho Ngwema said.
At 9.50am it was considered safe for the trial to go ahead. One of the dogs brought in by the police was a real bloodhound, a very energetic animal that constantly jumped up to its boss.
In contrast, Van der Walt, who had given evidence in some of South Africa's most high-profile cases, struck a much more dignified picture as he took the stand for the second day of his evidence.
He told the court that they found documentation indicating that Shaik, "as representative of the ANC", was contacted by the Malaysian firm Renong Berhard and Renong as long ago as 1994.
The fax indicated that Malaysian minister of defence Dato Sri Mohd Najid was available to meet with Shaik and ATE, a South African avionics company.
In 1994 one Florence from the Malaysian firm Renong Berhard and Renong sent a fax to Shaik in his capacity as a "representative of the ANC" ***.
Another letter indicated that Shaik had visited Malaysia with Zuma. In the letter, dated August 1995, Shaik wrote to the South African High Commissioner in Malaysia to thank her for "the assistance and guidance during the trip with Zuma".
Shaik told the High Commissioner that Nkobi Holdings "has acquired a major interest in share ownership's in defence-related companies in South Africa".
Around the same time he told the deputy defence minister of Malaysia that his company, Nkobi Holdings, "purchased majority shares in South African companies involved in defence-related technologies.
But, said Van der Walt, the Nkobi group had very limited operations and investments at that stage as the company was still very young.
"The letter did not accurately reflect the group's then position," he said.
He explained to the court that the closest Nkobi came to majority shareholdings at the time was an agreement by Thomson-CSF to let Nkobi have between 30% and 35% of the shares in their South African company.
A document dated two months later, Van der Walt said, made it clear that Shaik believed he could influence tender procedures.
In this period Van der Walt found evidence that Shaik was aggressively seeking new ventures for Nkobi Holdings. It was at the same time that one of the companies in the Nkobi group, Clegton Investments, paid R3 500 to Mrs Kate Zuma on behalf of the deputy president.
Van der Walt also explained to the court what they found Nkobi's position to be in relation to a proposed Point development in Durban that would have been worth about R100m.
He said this project with Renong was "one of the first projects in which the Nkobi group was interested." This was at the end of 1995.
He said they found letters about various meetings in Malaysia involving South African officials, Zuma (who was MEC for tourism and economic development in kwaZulu-Natal at the time) and representatives of the Nkobi group.
Both Shaik and the Malaysians involved Zuma in the negotiations. Shaik wanted 49% shareholding in the development. Renong wanted a South African partner they could trust.
In letters written to Renong, Shaik said he could influence and accelerate the development. But in February 1997 Shaik was still proposing meetings with Zuma and Renong about the point development.
In one of these letters he said Nkobi had a 43% interest in Thomson-CSF. At most van der Walt said they could find 41% direct and indirect shareholding.
Van der Walt said they found that Zuma tried to help Nkobi Holdings to get involved in the shareholding in the Point development, but there was not proof that his efforts paid off.
At the stage of the February meeting, payments by the Nkobi group to Zuma however totaled R9 500.
The trial continues on Monday.
With acknowledgements to Estelle Ellis and the Weekend Argus.
* The Defendant admits that he made most of the payments, that this was because the Beneficiary was a close and dear friend.However, it is clear from the forensic evidence that this "friendship" only became close enough for remunerative reward once the Defendant started pitching for government contracts - don't take it from me, take it from the Bloodhound.
** The founding law of the current Republic is the Constitution, Act 108 of 1996, as adopted on 8 May 1996 and amended on 11 October 1996 by the Constitutional Assembly.
Chapter 13, Finance, of the Constitution states that :
217. (1) When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective"
Section 187 of the Interim Constitution was to impose legislative duties on the national and provincial legislatures to implement a tendering system which is "fair, public and competitive".
Any which way, They lose.
*** The torture never stops.