Publication: Cape Argus Issued: Date: 2004-10-22 Reporter: Tanya Broughton

Top Auditor on Shaik's Paper Trail



Cape Argus

Date 2004-10-22


Tanya Broughton

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He calls himself the bloodhound - and for the past year his quarry has been Schabir Shaik.

The evidence yesterday of top forensic auditor Johan van der Walt of auditing firm KPMG could be classified dull.

But it is crucial. It is the paper trail - the very foundations of the state's case in its bid to prove Shaik's guilt.

The financial advisor to Deputy President Jacob Zuma is on trial before Judge Hilary Squires in the Durban High Court charged with two counts of corruption and one of fraud.

The charges relate to allegations of a corrupt relationship between himself and Zuma, that he paid the senior politician in return for business influence and that he had set up a bribe from French arms deal preferred bidder Thomson CSF.

Shaik has pleaded not guilty to the charges. Although he admits making payments to Zuma, he says these were done in the name of friendship.

The KPMG report is about 250 pages long and is supported by dozens of files of documents and annexures which were wheeled into court on trollies.

It is being released piecemeal to the media, as each page is put into evidence, the judge again warning the media "not to anticipate evidence not given".

Asked by Judge Squires whether he was a "financial detective", van der Walt responded: "I would call myself a bloodhound."

He described the investigation as similar to doing a jigsaw puzzle.

"There are thousands of pieces ... I pieced it together ... there might be some pieces missing but it doesn't really affect the picture."

The auditor explained how he and his team had had access to a strong room full of documents in order to probe the allegations of corruption.

Referring to the salient features of the report, he said it was clear Zuma had experienced financial difficulties from as early as January 1995, when he received a letter of demand from his banker in relation to his mortgage bond.

"Debts were incurred when he could not settle them ... his situation deteriorated to such an extent that legal proceedings were taken against him."

Shaik had presented himself on numerous occasions as Zuma's financial advisor.

Yet Zuma's financial situation did not improve.

Between 1995 and 2002, Shaik and the Nkobi group had settled Zuma's debts in excess of R1.2 million and the practice continued after that.

"Shaik acted as a person who settled his debts ... there is no proof that real financial advice was given ... a financial advisor would advise somebody not to get into debt, not to buy the car if you can't make even the first repayment," van der Walt said.

The personal balance sheets of Zuma and Shaik indicated that these were not treated as loans, as had been contended.

van der Walt said that throughout the existence of the Nkobi Group, Zuma had, at various times and especially in relation to deals with the Thomson group, represented the Nkobi group in meetings with individuals.

Regarding the Nkobi's Group's financial situation, van der Walt said that at times it had been in overdraft and cheques and debit orders had been returned.

And yet it had continued to bail Zuma out. "There was a direct correlation between the group's overdraft and the amount paid to and on behalf of Zuma," the auditor said.

van der Walt has placed before the judge details of the shareholding structures of all of Shaik's companies.

He produced an old notebook, apparently seized from Shaik's offices, which reflected proposals that Zuma be given a 2,5% interest in a nominee capacity in Nkobi Holdings.

van der Walt also referred to an unsigned letter purportedly from former ANC kwaZulu-Natal leader Zweli Mkhize, in which Shaik was thanked for his contributions to the party of R2.2m and a further R1m in dividends.

"There are a number of documents like this - particularly regarding the Point Development - letters written on behalf of others and then put on file, unsigned," he said.

Over the next few days, van der Walt is expected to expose the details of payments Shaik allegedly made to Zuma and the projects his company invested in, including the lucrative arms deal.

With acknowledgements to Tanya Broughton and the Cape Argus.