Durban businessman Schabir Shaik told his auditor that he had obtained a cession of Deputy President Jacob Zuma's pension to ensure that he would be repaid.

This was illegal, auditor Ahmed Paruk told the Durban High Court this morning.

Paruk is a partner at the auditing firm David Strachan & Taylor.

The State alleges that Shaik is responsible for the write-off of loans worth R1,2 million in his company Nkobi's annual financial statements for 1999.

These allegedly included money paid to Zuma, as well as loan accounts of Floryn Investments, a company that Shaik said had been a vehicle for paying donations to the ANC, and Clegton Investments, through which payments for a flat occupied by Zuma were made.

Paruk said he had never discussed payments made to Zuma with Shaik, but knew that Shaik was Zuma's financial adviser.

After 1999, Paruk became aware that payments for the Zuma children's education were noted in Nkobi's books, but he said he was not aware that some of the R1,2m written off Nkobi's books in 1999 had been paid to Zuma. He only found out later that there was an account called Jacob Zuma that was aligned to Shaik's loan account in Nkobi's books.

With acknowledgement to Estelle Ellis and Cape Argus.