Fraud and corruption accused Schabir Shaik had yet to repay R500 000 of the funds provided by former president Nelson Mandela to refurbish the Zulu royal household, the Durban High Court heard yesterday.

The amount is owed to the African National Congress (ANC) Development Africa Trust Fund, which was given R2m by Mandela four years ago.

Development Africa was a trust established to deal with the party’s welfare issues, such as school fees for children of unemployed exiles.

In 2000 Mandela gave Deputy President Jacob Zuma R2m, half of which was earmarked for the Development Africa coffers to assist with the Zulu royal household repairs and the other half to the Jacob Zuma Education Trust.

The money was deposited in the bank account of Floryn Investments ­ a dormant firm belonging to Shaik, and used to receive donations for the party.

Shaik has pleaded not guilty to two counts of corruption and one of fraud. His trial resumed yesterday after a three-week break.

Yesterday, KwaZulu-Natal finance MEC and former ANC provincial treasurer Zweli Mkhize said that Shaik, as Zuma’s financial adviser, was not aware of the existence of Development Africa, and had withdrawn R1m “to prevent it being eaten up by Zuma’s overdraft”.

Mkhize, who was also a Development Africa trustee, said at the time the trust was established the royal household was “in a poor financial state” and Mandela was “approached to lend a hand”.

Mkhize said on realising the error Shaik sought to reimburse the trust. He gave Development Africa four post-dated cheques of R250 000 each in February 2001. The first of these was immediately cashed. When the second one was presented for payment the ANC discovered Shaik had stopped payments and another approach was made to recall the money, Mkhize said.

Shaik then provided another two cheques for R125 000 each that were cashed in September 2001.

“The trustees are not uncomfortable that Shaik still owes them R500 000 or that the money is sitting in a (Nkobi Holdings) bank account, Mkhize said.

Since 2001, said Mkhize, the only formal attempt made to recover the money from Shaik was a letter of demand local business man Vivian Reddy wrote several years ago.

Shaik had no deadline by which to repay the outstanding balance, nor had the trustees discussed interest payments.

Earlier in the day Mkhize painted a picture of a cash-strapped ANC, struggling with political violence in KwaZulu-Natal, to which Shaik made regular contributions.

He described Shaik as “a major contributor… one of the most important” and the “most generous”.

With ackowledgements to Nicola Jenvey and Business Day.