Deputy President Jacob Zuma's R1,3-million, 12-unit village at Nkandla, KwaZulu Natal, is a jewel.

Built using money Zuma allegedly received in bribes from French arms company Thales (formerly Thomson CSF), the village is situated about 80km from the nearest development.

The village is surrounded by run-down houses and kraals. About 30km of the road leading to the estate is gravel, and a tuckshop and primary and high schools are the only "modern" buildings close by.

The estate forms part of the Scorpions' investigation into allegations that businessman Schabir Shaik arranged bribes for Zuma in return for protection of Thomson CSF's arms contract tenders. Shaik is Zuma's financial adviser and is standing trial for corruption linked to the arms deal.

The charge sheet against Shaik details how money for the development was allegedly channelled from Thales, through accounts run by Shaik, to another account by prominent Durban businessman Vathasallum "Vivian" Reddy.

The charge sheet says that in June 2000 Zuma reached agreement with builders Eric's Industrial Plumbing and Building cc – a close corporation represented by Eric Malengret – for the development of the village at an initial cost of R2 428 360, which was reduced to about R1,3-million.

The village was "finalised" in April 2001, but payments for the work "were not forthcoming". An unnamed "third party who loaned the money to Zuma" made three payments totalling R190 000 to Malengret between August 14 and October 18 2000.

But, says the charge sheet, the very next day, Shaik asked Malengret to immediately stop building – and Zuma then asked Malengret to continue building, as he was arranging a bond.

On October 31 2000 Reddy paid R50 000 from the account of one of his companies, Edison Health (Pty) Ltd, into the Eric's account, and followed it three days later with another R50 000 from his personal account. Eric's reflected this in its cashbook as "RECEIPT JZ".

Most of Zuma's debt was settled with Malengret in December 2002, using a R900 000 First National Bank bond facilitated by Reddy, who signed a R400 000 suretyship.

"Without his suretyship the application would not have been approved, due to the financial profile of Zuma and the fact that the property in question forms part of tribal land," the charge sheet states.

Reddy also agreed to pay monthly instalments of R12 117,11 for the first year. Zuma would take over payments after that. "The FNB bond was a device in terms of which Reddy replaced Malengret as Zuma's debtor," says the charge sheet.

In addition, on February 22 this year Zuma signed an "acknowledgement of indebtedness memorandum of agreement" with Malengret, promising to pay an outstanding debt of R250 000 plus legal costs and interest of 15,5% a year, in monthly instalments of R10 000.

"Zuma does not appear to be in a financial position to make such payments," notes the charge sheet.

It goes on to state that in early December 2000 Zuma tried to deposit a R1-million cheque into the account of the Development Africa Trust, set up by Reddy. The cheque bounced.

On February 16, Thales International Africa-Mauritius paid R250 000 into the account of Kobitech, one of Shaik's companies. Eight days later Shaik's company Nkobi deposited the same amount into Development Africa Trust's account.

Simultaneously, Nkobi issued three post-dated cheques of R250 000 each in favour of Development Africa – but cancelled them two months later.

"This indicates that Nkobi intended to pay Development Africa R1-million, which is an amount equivalent to the R1-million cheque that Zuma issued to Development Africa as described above, and which bounced. It is also an amount equivalent to the bribe agreed to between Zuma, Thomson and (Shaik)," the charge sheet states.

Shaik allegedly also made two earlier payments of R125 000 each to Development Africa, on September 4 and September 17 2001.

The indictment charges that, therefore, Thomson/Thales funded Nkobi, and that Nkobi "effectively funded" Zuma using mechanisms such as Development Africa, Reddy, Eric's or Malengret – or all of them.

With acknowledgements to Xolani Mbanjwa and the Cape Times.