Full Text of Shaik Appeal Judgment Summary
This is the full text of the judgment summary read on Monday by Supreme of
Appeal president Craig Howie in Bloemfontein in the appeal of Schabir
The Court has prepared written reasons for judgment in these two cases. The
judgments are unanimous. Before stating the orders, which come at the end of
each judgment, we shall give a brief outline of the Court's principal
It must be noted that this summary forms no part of the judgments and
therefore does not add to them or explain them. It merely summarises.
In the criminal case Mr Schabir Shaik and various of his companies (which
we shall call the Nkobi group) were charged on three counts.
We shall focus on the case of Mr Shaik for purposes of the
On count one he was charged with contravening the Corruption Act by making
payments to or on behalf of Mr Jacob Zuma with the corrupt intention to
influence Mr Zuma to perform his duties in ways that would be to the advantage
of Mr Shaik's commercial interests.
Mr Shaik's counsel said the prosecution failed to prove what Mr Zuma's
duties were or what they involved. We think the answer is in the
At the times with which the case is concerned Mr Zuma was initially the
Member of the KwaZulu Natal Executive Committee (MEC) for Economic Affairs and
Tourism and subsequently the Deputy President of the Republic.
The Constitution says an MEC and a cabinet member (which the Deputy
President is) may not do three things: (1) undertake paid work, (2) act in a way
which bring his official responsibilities and private interests into conflict,
or (3) use his position to enrich himself or improperly benefit another
Therefore if Mr Shaik corruptly gave benefits to Mr Zuma to influence him
to act in any of those ways then Mr Shaik committed the offence
It was admitted that Mr Shaik made 238 payments totalling over R1,2m from
October 1995 to September 2002 and that they were to the benefit of Mr
However, Mr Shaik's counsel argued that payments equal to about a third of
that total were regarded by him really as payment to the ANC even if their
effect was to benefit Mr Zuma.
We find that the Nkobi group's books and a number of relevant witnesses,
for both prosecution and defence, show that Mr Shaik could not believably have
regarded any of the payments made as payments to the ANC rather than to Mr
That argument, like many other issues in the case, engage Mr Shaik's
credibility as a witness.
The trial court, which had the opportunity for many days to hear him
testify and assess his truthfulness in the light of all the other evidence,
rejected his evidence where it conflicted with acceptable contrary testimony or
with circumstance or clear documentary evidence.
We consider that the trial court's credibility finding against Mr Shaik was
fully justified and we agree with it on this and all other issues where it is
We therefore find that all the payments were to or on behalf of Mr
As to the reason for the payments, the defence case was that they were made
out of friendship or were loans.
The defence relied on purported acknowledgments of debt and a purported
loan agreement and on evidence of a long standing friendship between Mr Shaik
and Mr Zuma.
We find a wealth of evidence to show that the friendship, which we accept
exists, was persistently and aggressively exploited by Mr Shaik for his own and
his group's business advantage.
In particular there were four occasions revealed by the prosecution
evidence in which interventions by Mr Zuma at Mr Shaik's instance advanced, or
were aimed at advancing, Mr Shaik's commercial interests.
The most important one concerned the Defence Force's arms procurement
Mr Zuma's efforts contributed to Mr Shaik acquiring a material interest in
a highly lucrative contract to supply the armaments for the Navy's new corvettes
The evidence also showed that when the payments were made Mr Shaik was in
no position to afford them without substantial borrowings and Mr Zuma had no
realistic prospects of repayment.
In the light of all the evidence on count 1 we find that the only
reasonable inference is that the payments were corruptly made to influence Mr
Zuma to act in conflict with his constitutional duties and thereby enhance Mr
Shaik and his group's business interests.
We therefore find that Mr Shaik was correctly convicted on count one of
On count two, Mr Shaik was charged with fraud arising out of an irregular
writing off in the Nkobi group's 1999 annual financial statements of about
The writing off was admitted, as was its irregularity. It was also admitted
that the write-off erased Mr Shaik's debit loan account in his group with the
result that the financial statements gave a better picture of the group'
financial state to present to its bank than was truly the case.
The importance of that result was that the group was crucially dependent on
overdraft facilities. In addition the write-off served to avoid a qualified
It was not disputed that the group's auditors were responsible for the way
in which the write-off was effected.
Mr Shaik testified that he had nothing to do with it and did not know it
was being done. The main evidence for the State was given by one of the
The trial court found him an unsatisfactory witness. We agree.
We also agree, however, with the trial court's conclusion that the auditors
would not have had reason, unprompted, to contrive the write-off by themselves
and that circumstantial evidence and the testimony of two other prosecution
witnesses pointed to Mr Shaik's having been a party to it.
The other legal elements of the crime of fraud being present, we think that
Mr Shaik was correctly convicted on count 2.
On count three. Mr Shaik was charged with corruption for having brought it
about, in collaboration with Mr Zuma and Alain Thétard of Thomson-CSF (the
French arms supplier), that Thomson offered Mr Zuma R500 000 per year until a
certain specified event.
In return Mr Zuma would shield Thomson from investigation into their role
in the much discussed *3 arms procurement dealings, and also support its future
projects in South Africa.
The key State evidence consisted of a document widely referred to as ‘the
It is the printed version of a handwritten draft letter compiled by Thétard
following on a meeting with Mr Shaik and Mr Zuma.
It was addressed to his superiors in Paris. It conveys that Mr Shaik
requested Thomson to make the payments referred to in return for the favours
mentioned; that Thétard had asked for Mr Zuma's confirmation of the request; and
that Mr Zuma had done so in an encoded form.
The prosecution established that the fax was sent and also proved
circumstances from which it is to be inferred that the request was accepted by
At the trial the defence objected to the fax being admitted in evidence.
The trial judge ruled it admissible on a certain ground.
We think, on a different ground, that the fax is indeed admissible *4. In
addition, not only does the fax prove that Thétard wrote the words it contains
but there is abundant surrounding evidence to find that there was proof beyond
reasonable doubt that what Mr Shaik requested of Thomson was a bribe to Mr Zuma
Even if Mr Zuma was unaware of the request or had not agreed to accept the
bribe there was nevertheless proof of commission by Mr Shaik of all the
necessary elements of the offence charged.
Mr Shaik's evidence that he, Mr Zuma and Thétard had indeed met shortly
before the date of the fax but that the subject matter of their discussions was
a request that Thomson make a donation to the Jacob Zuma Educational Trust, was
rightly rejected by the trial court.
He was therefore correctly convicted on count three. *6
Turning to sentence, 15 years imprisonment was imposed on each of counts
one and three. On count two, the sentence was three years.
The sentences were ordered to run concurrently. Only the 15 year sentences
were subject to appeal. The 15 year terms were mandatory unless substantial and
compelling circumstances justified less.
The trial Judge dealt fully with all the relevant facts and circumstances.
He concluded that there were, whether on count one or count three, no
substantial and compelling circumstances justifying less that the sentence
Given the very high level at which the corruption in this case occurred,
given corruption is inconsistent with the rule of law and the fundamental values
of the Constitution, and given that corruption lowers the moral tone of a nation
and negatively affects development and the promotion of human rights, we do not
think any grounds have been shown to interfere with the sentences
In so far as the civil case is concerned, the State, through the National
Director of Public Prosecutions, applied after the criminal trial for
confiscation of the proceeds received by Mr Shaik and four of his companies in
consequence of their conviction on count one.
A confiscation order was granted. It required Mr Shaik and two of his
companies to pay the State three particular amounts.
The first was the value of the Nkobi shareholding in the company which is
part of the consortium which won the corvette munitions contract.
As mentioned earlier, that shareholding was acquired as a result of Mr
Shaik's corruptly obtained intervention by Mr Zuma.
The second amount comprised dividends paid in respect of that shareholding.
The third amount represented the value of the Nkobi shareholding in another
We find that the confiscation order was rightly granted as regards the
first and second amounts. We find the appeal succeeds as regards the
The orders of the Court are as follows:
The order of the court is accordingly as follows:
1. All the applications for leave to appeal that were referred for argument
2. All the appeals are dismissed.
We accordingly make the following order:
1. The appeal by the first, second and third appellants against paragraphs
1 and 2 of the order of the court a quo is dismissed.
2. The appeal by the first, second and third appellants against paragraph 3
of the order is upheld. That paragraph is set aside and replaced with the
3. The first, second and third appellants are ordered jointly and severally
to pay 90 percent of the respondent's costs of appeal and the respondent is
ordered to pay 10 percent of the first, second and third appellants' costs of
4. No costs order is made in respect of the fourth and fifth appellants in
the appeal but the costs order made by the court a quo is varied by the addition
of the following paragraph:
5. All the orders for costs are made upon the basis that they are to
include the costs incurred consequent upon the employment of two
With acknowledgement to Sapa.
*3 Gross understatement.