After completion of my training, I was tasked with the establishment of channels for the transfer of funds from outside South Africa to underground structures within the country.

As a result, I travelled to and from South Africa on a regular basis and became a courier of information from my brother Mo Shaik to Zuma, who was at the time the head of an intelligence unit for the ANC. I regularly met and briefed Zuma, and sometimes Pahad, in London.

When the ANC was unbanned in 1990, Zuma was one of the first senior ANC exiles to return to the country.

Zuma suggested to the then-treasurer-general of the ANC, Thomas Nkobi, that I could be of assistance to him, and I was appointed as one of the assistants to Nkobi and stationed at Shell House, Johannesburg.

Many of the exiles who returned to the country, like Zuma, were provided with financial assistance by supporters of the ANC. Within my then-moderate means, I also assisted Zuma financially where I could.

Over the years, a close friendship had developed between Zuma and myself, as well as between our respective families.

Between 1990 and the first democratic elections in 1994, I travelled extensively abroad with Nkobi to solicit funds for the ANC from Malaysia, Pakistan and the United Arab Emirates, and other private donors.

During this period I built up a rapport with the Malaysians. Nkobi recognised this and tasked me to work with the business representatives of the Malaysian Umno Party to understand how business was done in that country with their system of economic empowerment or "bumiputera" (translated as "empowerment of sons of the soil *1").

After the general elections in 1994, I was planning to set up a corporate structure on the Malaysian model, which would have included the ANC as a shareholder.

I was, however, advised that the ANC would not become involved in business in this manner.

I was convinced that economic empowerment for the previously disadvantaged in South Africa, albeit on a model slightly different from the Malaysian model, was going to play an important role in the future of this country and I began to position myself accordingly *2.

During 1994, I incorporated Accused 9 and 10 and during 1995 Accused 2 and 3 (companies), with the other accused to follow.

Prior to the first democratic election and thereafter, there existed severe tension in KwaZulu Natal between factions of the Inkatha Freedom Party and the ANC.

For me, as a businessman, it was of the utmost importance that the situation in KwaZulu Natal should be stabilised and should remain stable for the province to attract foreign investments. It was, and still is, widely recognised that Zuma was the one politician who had the standing among the supporters of both sides in the violence to bring about a peaceful solution.

It was therefore of importance that he be appointed to a senior political post in the province and that he remained in that position until such time at least as the position had sufficiently stabilised.

After the 1994 elections, Zuma was appointed the MEC for economic affairs and tourism in the KwaZulu Natal legislature. In this capacity, he asked me whether I would be prepared to act as an adviser to him, without remuneration *3. I indicated that I was prepared to do so ...

Thereafter Zuma regularly discussed the economic challenges in the province with me and requested my input to assist him.

During the period 1994 to 1997, Zuma was the national chairperson of the ANC and in 1997 became the national deputy president of the ANC.

During the course of 1995 ... the late Mrs Kate Zuma telephoned me and inquired whether I would be able to help her with R3 500 as she was unable to contact her husband. I arranged for the amount to be transferred to her account.

She again contacted me on or about March 4 1996 under similar circumstances with a request for R2 500, which I had deposited into her account. I do not recall whether I ever mentioned these incidents to Zuma.

At approximately the end of 1996 or the beginning of 1997, Zuma confided in me that he had serious financial problems and that he was considering leaving politics. I was concerned that such a move may adversely affect the relative peace the province was experiencing and I implored him not to leave politics.

As a close friend, I was also prepared to do what I could to assist him. We discussed the issue and the extent of his financial problems. He was specifically concerned that he might not be able to afford a proper education for his children.

I undertook to look into his affairs, to restructure his debt and/or to make arrangements with his creditors for the settlement thereof and to put his children onto a bursary scheme in my group of companies.

He was, however, insistent that he would accept my assistance only on the understanding that whatever funds I may spend on his behalf will be repaid to me.

I reluctantly agreed that such monies as I may expend on his behalf would be regarded as loans to him, on the clear understanding that no interest would be payable thereon, due to my religious beliefs.

I engaged in negotiations with Zuma's creditors with a view to restructure his debt and/or to reach agreements with them regarding the settlement thereof.

One of these creditors was Dawood Mangerah, of AQ Holdings in Stanger. Mangerah was the treasurer of the ANC branch at Stanger. Zuma informed me that he needed the funds provided by Mangerah as a result of expenditure he incurred on behalf of the ANC. I negotiated with Mangerah and later with his attorneys on behalf of Zuma and made certain payments in this regard. I regarded these payments as contributions to the ANC.

At the beginning of 1997, I received a fax at my house *4 addressed to Zuma from the office of the minister of national intelligence. In this fax, Zuma was warned that information was obtained which indicated that he could expect an attempt on his life *5.

I was aware of the fact that two of Zuma's residences had previously been burned down in the violence and that his residence at the time could not be properly safeguarded. We discussed this, and in view of the threat against his life, I suggested that he move into an apartment at 191 Mallington (sic - Malington) Place, Durban, which was rented by Accused 3 for our financial manager at the time.

I undertook to pay the rent for this apartment. I regarded the payment of this rental as a contribution to the ANC.

Once Zuma's financial position had been stabilised, payments on his behalf were primarily done in respect of the education of his children.

I instructed the accounting department to keep a full record of all payments made on behalf of Zuma from company records, as well as from my personal account, and to debit payments made from company accounts against my loan account.

Zuma insisted that an acknowledgement of debts be drafted as proof of his indebtedness to me. I did not regard this as necessary and initially ignored his requests.

During approximately the beginning of 1998 Zuma became insistent and I instructed my attorney to draw an acknowledgement of debt. This was done and Zuma signed various acknowledgements of debt in my favour in respect of monies expended on his behalf as set out herein above.

These acknowledgements of debt were later superseded by a loan agreement for a revolving loan up to R2-million. In this document, provision is made for interest to be paid on the loan. Despite my protestations, Zuma insisted that an interest clause should be inserted. I told him that I will donate any interest that I may receive to charity.

The payments referred to in sub-paragraphs 4.14, 4.15, 4.16, 4.17, 4.20 and 4.22 above were not payments made to or on behalf of Zuma, but were payments which were made on behalf of the ANC.

These payments should have been accounted for as contributions to the ANC.

I consequently deny, in my personal capacity as well as in my capacity as the representative of the corporate accused, that any one of the payments set out in the schedule to the indictment were made: unlawfully and corruptly; with the intention to influence Zuma to commit and/or omit to do any act in relation to his powers and/or duties to further the interest of the accused and/or the entities associated with the accused; and/or with the intention to reward Zuma as alleged.

'He had no say in arms-buying'

In his pleading, Shaik also said Zuma had no power to influence the arms deal.

He reached an understanding with the French Thomson Group (TCSF) that they would conduct joint ventures in South Africa.

Later he learned that TCSF had been told that senior ANC members did not regard his companies or him as suitable black empowerment partners.

"I wrote a letter to J P Perrier, the executive chairman, international business development, of TCSF, dated March 17 1998, to urge him to discuss their concerns with Zuma in his capacity as deputy president of the ANC. This letter was copied to the then president of the ANC, Mr Thabo Mbeki, as well as to Zuma," Shaik said.

Zuma assured Perrier in London early in July 1998 that Shaik's companies and Shaik himself were "indeed acceptable" to the ANC as black economic empowerment partners. On November 18 1998, Zuma met Perrier in Shaik's office *6.

At the time, Zuma was an MEC in the KwaZulu Natal legislature and "had no power or duty" with regard to the arms acquisition process.

"I also have to point out that during the period that Zuma was an MEC in KwaZulu Natal, my companies tendered for a number of contracts in this province, including for his department," Shaik said.

Apart from one contract for the Department of Housing, which fell under an Inkatha Freedom Party MEC, "we were unsuccessful with all our tenders".

With ackowledgement to The Star.

*1  More accurately as cronyism and nepotism - genuine.

*2  Sure and because the means were at that stage only "moderate", we bribed our cronies using overdrafts.

*3   No remuneration - just bumiputera.

*4  Was this fax encrypted?

*5  It can only be poppycock that a genuine fax concerning an assassination is sent in the clear to a recipient other that the subject or their security personnel.

*6   Zuma denied this in his response to a formal parliamentary question.