Durban businessman and veteran ANC member Abdool Mangerah on Wednesday told the High Court that to save his "close friend" Deputy President Jacob Zuma from embarrassment, he sent a fax to the party's office falsely indicating that Zuma borrowed money from him for ANC business.

Testifying at the Schabir Shaik fraud and corruption trial, Mangerah, owner of import/export company AQ Holdings, said Zuma, who had worked closely with him in the southern Natal executive of the ANC in Durban, started regularly borrowing money from him in 1994.

Zuma, at the time the KZN Tourism and Economic Affairs MEC, initially borrowed "small amounts", but in December 1995, he needed R100 000, which Mangerah lent him.

"These debts were incurred by Mr Zuma in his personal capacity. I was given the impression that Mr Zuma was being pressurised by financial institutions to settle his debts," Mangerah said.

When Zuma wanted a fax of a "breakdown" of his debt, "we made it look like it was owed to me by the ANC and not him".

"To cover up", Mangerah added a note on the fax requesting that ANC provincial treasurer Zweli Mkhize deposit the money into AQ Holdings's bank account.

He knew that staff at the ANC office would have access to the fax machine and did not want to embarrass "his personal friend" by revealing that Zuma owed him R154 000.

Mangerah said the loan was short term and he expected it to be paid back within two to three months.

When this did not happen, Mangerah spoke to Zuma, who allegedly asked Shaik to settle his debt. Mangerah said Shaik invited him to a meeting in Zuma's office where he handed him several post-dated cheques.

"I was disappointed The account was very, very long overdue. I expected settlement sooner than those post-dated cheques," he told the court.

Some of the cheques bounced and he handed the matter over to a lawyer.

It was agreed that Mangerah was willing to accept R2 500 a month from Zuma. Eventually, R150 000 of the R154 000 was paid back.

Mangerah's evidence relates to the corruption charge against Shaik, which deals with alleged payments to or on behalf of Zuma for his influence.

Defence advocate Francois van Zyl told Mangerah that although Zuma borrowed money in his personal capacity, he used it for ANC business.

Van Zyl said Shaik paid back the loan for Zuma because "it was his contribution to the ANC".

Mangerah declined to comment on Shaik's argument, but said at no stage was he willing to write off the loan to Zuma as a donation as he had already made large contributions to the ANC.

He did not expect anything from Zuma, only Zuma's prayers for his good health.

Mangerah's testimony was followed by evidence from Gerhard Visagie and Jannie Lubbe, who worked for the Heath Unit, which first probed irregularities in the arms deal.

Their evidence relates to count three, which alleges that Shaik solicited an annual R500 000 bribe from French arms company Thomson-CSF to Zuma in return for protection from the investigations.

The court on Monday heard how the unit became involved in the investigation, but was stopped from continuing.

Thomson-CSF auditor David Read also testified. He confirmed that Thomson-CSF secretary Susan Delique told him about the notorious fax that allegedly records the bribe.

The day's proceedings concluded with evidence from First National Bank Home Loans manager Ingrid Havermann about the bond for Zuma's Nkandla village.

The bond was initially set at R850 000 but was reduced to R650 000 because of Zuma's poor credit history.

But Havermann said the bond was eventually registered at R900 000 "in light of the fact that it was the deputy president's application".

The court heard that wealthy Durban businessman Vivian Reddy stood as surety for the bond.

The trial continues on Thursday.

With acknowledgements to Nivashni Nair and The Natal Witness.