Publication: The Star Issued: Date: 2004-10-22 Reporter: Estelle Ellis

'Zuma Given Shaky Advice'



The Star

Date 2004-10-22


Estelle Ellis

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Durban businessman Schabir Shaik was not much of a financial adviser to Deputy President Jacob Zuma - in fact, his advice had no impact on Zuma's financial difficulties.

This was the evidence yesterday of forensic auditor Johan van der Walt, starting what is expected to be a marathon session setting out the paper trail on which the state has based some of its allegations against Shaik.

Van der Walt told the Durban High Court that Zuma was in financial difficulty from early 1995 and could not settle his debts.

In one case, in 1997, Van der Walt said, Zuma could not even pay the first instalment on a new car. The car in question was a Mercedes E320 purchased for R305 000, and Zuma had to pay a monthly instalment of R8 024.

"Shaik presented himself on numerous occasions as the financial adviser of Zuma. Zuma's financial position did not improve during the time when Shaik acted as his financial adviser," he said.

Van der Walt told the court that auditors had found payments to or on behalf of Zuma from Shaik and the Nkobi group totalling R1,2-million. "Shaik and the Nkobi group provided continuous financial support to Zuma."

Van der Walt said auditors were asked to investigate only up to September 2002, but they understood that "this practice continued after September 2002".

Van der Walt said a good financial adviser would have told Zuma to stop making debt. "Shaik settled debts for Zuma. I found nothing to indicate that he gave him financial advice," Van der Walt said.

It became clear from his report that the Nkobi group were financing their own operations by overdraft. He said that at times Nkobi exceeded its overdraft limits, and a number of cheques and debit orders were returned by the bank.

"Zuma experienced a similar position," Van der Walt said.

He said that putting together a picture of what happened at the Nkobi group was like building a puzzle: "Some pieces may not be there, but that does not spoil the picture."

Van der Walt took the stand just after 10am yesterday. Behind him stood a row of pale blue files - a neat reconstruction of the boxes of documents seized by the Scorpions.

"They showed me a strong-room full of documentation. I physically went through those," Van der Walt - who also gave evidence in the trial of anti-apartheid cleric Allan Boesak and convicted stockbroker Greg Blank - told the court.

For his report, he studied six years of operations by the Nkobi group of companies - the corporate entity that Professor Themba Sono had earlier said Shaik had hoped to turn into the "Murray & Roberts, the Altron or the Oppenheimers of South Africa".

Shaik and 10 of his companies have been charged with two counts of corruption and one of fraud. He has pleaded not guilty to all these charges.

Van der Walt told the court that the Scorpions had supplied him with a yellow notebook they had seized from Shaik. In this notebook, Shaik had set out his plans for the share distribution of Nkobi Holdings, and a note indicating that 2,5% of shares were to go to "J. Zuma".

"There is no evidence that the shares were issued as planned," Van der Walt said.

He explained that he did find an unsigned document purporting to be a letter dated in 1999, thanking Shaik for contributing R2,2-million to ANC funds and a further R1-million in dividends.

Van der Walt said they found no proof that this money was donated. In fact, he said, there were no funds available for distribution as dividends.

Van der Walt also refuted Sono's testimony that he became a director of Nkobi in 1996, saying: "Sono never appeared as a director of the company in the directors' register."

A great deal of the day was spent explaining the company structure of the Nkobi group. The tedious evidence had few highlights, except when Van der Walt mentioned one Pickles as a shareholder in one of the companies.

"Is that a person?" Judge Hilary Squires asked rather sceptically.

"Yes," Van der Walt replied with a little smile.

Soon afterwards, Judge Squires announced that it was time for a break. The trial continues.

With acknowledgements to Estelle Ellis and The Star.