Organisation told to pay R101m to become part of company

For almost a year, Jabu Ngcobo was a director of Schabir Shaik's Nkobi Holdings - but he knew nothing about it.

His organisation, Workers' College, were given 10% of Nkobi's shares, but told to pay R101-million if they wanted to be part of the company.

Ngcobo and colleague Kessie Moodley gave evidence at Shaik's trial yesterday. Moodley told the court that the only place the black economic empowerment plan took them was to the witness stand.

The two of them were the final witnesses for the year in Shaik's marathon corruption and fraud trial. Shaik has pleaded not guilty to all charges.

Ngcobo told the court he had been chairperson of Workers' College since 1996. He said there were discussions about establishing a link between Nkobi and Workers' College.

"Yunis Shaik (Schabir Shaik's brother, who was involved with Workers' College for some time) suggested that the college get a stake in Nkobi," he said. "The story was that Nkobi will apply for the driving licence contract (to convert South African driving licences into the credit card format)."

"Workers' College was to be there for the black economic empowerment. We accepted the offer of 10% shareholding. No form of payment was mentioned. I never saw the document. There was discussion that the college should appoint a director, and my name was mentioned, but I knew nothing else."

Prosecutor Billy Downer SC showed him the brochure that said he was appointed on November 11 1998. "I don't know anything about it," he replied.

He said that when they withdrew from Nkobi after adverse publicity, he made it clear their withdrawal included his resignation, if he was a director.

The brochure also included a picture of Ngcobo. He told the court he went to the Nkobi office "to be introduced" to the staff.

"They took my photo in the boardroom. I thought they might use it to verify that Workers' College was participating in the driving licences (project)," he said.

He also said he received no notices of directors' meetings.

"In May this year, we decided to hand back the shares."

Moodley said he had investigated their shareholding in Nkobi after a newspaper article linked them with Schabir Shaik's company. He then discovered that they owed 10% of the shares in Nkobi.

He tried to set up a meeting with Shaik. After some correspondence, he received a letter from Shaik's attorney, Reeves Parsee, who wrote that they assumed they had relinquished the shares. "He was only 50% correct," Moodley said.

He said Workers' College did not know at that stage if they wanted to let go of their shares.

He then met with Parsee, who followed up with a letter. It stated that if they wished to continue as shareholders, they must pay Nkobi R101-million or give a guarantee of R10-million.

Moodley added that Workers' College had paid nothing for the shares. "At the time, there was a move to acquire black economic empowerment partners. It was a strategic move for Nkobi."

"It never got you anywhere?" Judge Hilary Squires asked. "It got us here today," Moodley answered.

He said they eventually transferred their shares back to Nkobi. "We asked for R200; the money is still outstanding."

Francois van Zyl SC, for Shaik, said Shaik's brother Yunis would say there was a dispute within Workers' College about how the shares had to be handled. He would also say he gave Schabir Shaik authority to act on behalf of Workers' College until this was sorted out. Van Zyl added that Yunis Shaik would testify that it was his idea *1 that Workers' College must get a stake in Nkobi.

The trial continues on January 31. - Special Writer.

With ackowledegment to Estelle Ellis and Sapa.

*1 Viva, bumiputera, viva.