For more than a year forensic auditor Johan van der Walt worked like a dog to sniff out the trail left behind by fraud and corruption accused Schabir Shaik.

Describing his expertise, the former policeman told Judge Hilary Squires at the start of his testimony in the Durban High Court on Thursday that if auditors were considered watchdogs he was a bloodhound.

Van der Walt was appointed by state prosecutors to investigate and audit a mountain of paperwork seized from Shaik and his firm, Nkobi Holdings.

By Friday Van der Walt had taken the court through only 84 pages of his 250-page report, and his revelations so far have already caused a stir.

In a nutshell he has revealed the complex, allegedly corrupt relationship, shared by Shaik and Deputy President Jacob Zuma in the multibillion-rand arms deal.

This, the state contends, would be a pivotal part of the "backdoor" process followed to obtain lucrative contracts.

The bloodhound auditor also said a certain document seized from Shaik's offices made it clear that he believed he could influence tender procedures.

It also seemed from his testimony that Shaik had not been forthright about many of his business dealings to potential foreign partners when Nkobi was still a fledgling company in 1995.

There was no proof Nkobi owned majority shares in South African companies involved in defence-related technologies as Shaik suggested to the Malaysian deputy defence minister at the time, said Van der Walt.

The report forms the basis of most of the state's case in which it is alleged that Shaik was involved in the fraudulent writing-off of amounts lent to Zuma in Nkobi's books.

Shaik was also allegedly involved in procuring a R1 million bribe for Zuma from French arms company Thint.

Shaik has admitted the bulk of the payments, but said it was an effort to help a close friend. He admitted the writing-off of some of the Zuma loans, but said this was done in error and later rectified. He denied he attempted to solicit a bribe for Zuma.

Van der Walt also told the court he and his team had found payments to, or on behalf of, Zuma from Shaik's Nkobi group totalling R1,2m and yet the group, like Zuma, was always in financial difficulty.

The prosecution, led by advocate Billy Downer, says those payments made no business sense as Nkobi was often in a "cash-starved" position.

Documents show that Zuma also tried to secure Shaik a stake in Durban's, now abandoned, Point development project in the second half of 1996, when Zuma was KwaZulu-Natal MEC for economic affairs.

The project, to have been led by the Malaysian Renong group, would have been worth at least R100m.

However, Renong had already offered a 49% black empowerment shareholding to a consortium led by Mzi Khumalo, today the chairman of JCI mining house.

After a visit by Shaik to Malaysia, Renong wrote to Zuma saying Shaik had expressed an interest and asked for his "judgment" on which group Renong should partner with.

"It appears that Shaik had reason to believe that Zuma's influence would ensure that the share of 49% or part thereof in the Point development would be allocated to the Nkobi group of companies."

Van der Walt said there was evidence that Zuma had participated in discussions and meetings with Renong to resolve the 49% stake.

Earlier in the week the state's second witness, Bianca Singh, formerly a personal assistant to Shaik, told the court she once heard a telephone conversation between Shaik and his brother Chippy, then head of arms procurement for the defence force.

She said after Shaik had re-assured Chippy that everything would be OK, he made a phone call and said, "Hello, my brother, hello JZ (Jacob Zuma).

Chippy's under pressure, we need help to land this deal," which, Singh said, was the arms deal.

She also recalled a November 2000 meeting in Mauritius with Thomson-CSF, the French arms dealer and manufacturer, attended by Shaik, Alain Thetard, a Thomson-CSF director, one Yann de Jomaron and her.

Nkobi Holdings, Thomson-CSF and African Defence Systems were in a partnership, which was part of the consortium that had been named by cabinet in 1998 as the preferred bidder for the Corvettes.

She said Shaik often spent money buying expensive suits for himself and Zuma because Zuma had a propensity for "cheap suits".

"He told me that I would, as his PA, always have to be at his beck and call like he was to various ministers. He said that he has to carry a jar of Vaseline because he gets f***ed all the time."

Singh said the trip to Mauritius had ended with "an incident of a personal nature", and her fleeing Shaik's bungalow at La Pirogue resort, leaving the island a day early and never speaking to him again.

Witness three, Sue Delique, a former secretary of Thetard, spoke of the infamous encrypted fax of March 17, 2000, from Thetard in Pretoria to colleague De Jomaron in Paris.

Thetard allegedly wrote that he had finally met Zuma who had confirmed a request allegedly made earlier by Shaik that, in exchange for R500 000 a year for two years, Zuma would protect Thomson-CSF against investigations and would support the company in future.

Delique said that when she quit Thetard after three months, she had "feared for her safety".

Consequently, she had grabbed her handbag and the nearest bunch of papers and fled.

Marion Marais, a third unhappy secretary and Delique's predecessor, told the court that Thetard was volatile, arrogant and once said he could not understand why South Africans made such a fuss about bribes when it was "normal practice" in France. -

additional reporting from Sapa 

With acknowledgements to Santosh Beharie and the Sunday Argus.