Publication: Business Day Issued: Date: 2004-10-15 Reporter: Tim Cohen

Riddle Over Mandela's R2m for Zuma



Business Day

Date 2004-10-15


Tim Cohen

Web Link


A riddle has emerged, in documents presented at the corruption trial of Durban businessman Schabir Shaik about R2m given to Deputy President Jacob Zuma by former president Nelson Mandela.

The prosecution's documents do not explain the exact nature and purpose of the donation, but they suggest heated, behind-thescenes arguments and a lot of financial manoeuvring between the three men.

The facts as presented by the state are these: from March 2000, Zuma's Nkandla traditional village project in KwaZulu-Natal was being held up because of his failure to make bi-weekly payments to the project contractor.

On October 2 2000 Mandela endorsed a cheque for R2m to Zuma. On October 17 Zuma deposited a cheque of the same amount into the Jacob Zuma Education Trust .

According to state advocate Billy Downer, the R2m was split evenly between this trust and a company called Development Africa, which, he says, is styled as a charitable trust, although it has not been registered as a fundraising institution.

R1m was paid into Development Africa, and the remaining money later passed through the Nkobi group accounts by a circuitous route. According to the state, a transfer of R900000 was made from Zuma's education trust account to a Nkobi group company called Floryn Investments on October 18.

Between November 3 and November 30, the money was passed on to the Nkobi group.

Zuma did make a R1m payment to the builders of the Nkandla development , but, for reasons that are not explained, Shaik stopped the cheque.

The state claims Shaik later paid R250000 to Development Africa to provide for partial settlement of Zuma's contractor debt. Downer says that "very, very recently" there had been "some" repayment of the R250000.

The charge sheet puts it this way: "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 and use his office or position to advance the accused's private business interests "

Shaik's explanation of these events is this: he acknowledges that he did transfer R900000 from Zuma's current account to Floryn Investments.

"I later established that the R2m was intended for the Jacob Zuma RDP Education Trust and the Development Africa Trust," he said in his plea statement .

"R1m was in fact paid to the Jacob Zuma RDP Education Trust on 17 October 2000.

"I had no knowledge of the Development Africa Trust at the time, but understood that Dr Zweli Mkhize was a trustee of this trust. He explained to me that the money was intended for confidential African National Congress (ANC) activities."

Shaik says he made arrangements with Mkhize to repay the funds transferred from Zuma's account to Floryn.

"I have since learnt that the object of the Development Africa Trust was to raise funds for the care and welfare of tribal leaders and the Zulu royal family. "

Despite there now being two explanations for this set of events, a host of questions remain about the R2m.

Why, for example, did Mandela hand over the money?

Why did Shaik remove the money from Zuma's account if Zuma owed it on his housing development project?

And, if Shaik's explanation is true, what is the ANC doing paying traditional leaders out of its own pocket?

With acknowledgements to Tim Cohen and the Business Day.