Audit firm clerk instructed to implement write-off

Durban businessman Schabir Shaik's Nkobi group of companies was regarded as a "controversial client" at the auditing firm where a clerk was asked to make R1.2 million in loans disappear from the books.

This was the evidence in the Durban High Court of the former clerk at David Strachan & Taylor, Anthony Gibb.

Shaik has pleaded not guilty to charges of corruption and fraud.

The state alleges he had a corrupt relationship with Deputy President Jacob Zuma, and tried to solicit a R1 million bribe for Zuma from French arms company Thomson.

But it was on one of the more technical charges against Shaik that the Durban High Court focused its attention.

The state alleges Shaik was responsible for the writing off of R1.2 million in loans, including some money paid to Zuma, in the books of the Nkobi group for the 1999 financial year.

The write-off wiped out the loan accounts for Shaik, Floryn Investments - which Shaik has admitted was a vehicle to donate money to the ANC - and Clegton Investments, through which payments for a flat occupied by Zuma were made.

Shaik said in his plea explanation that, when he realised the write-off was a mistake, he ordered that it be rectified.

Gibb told the court that the Nkobi group was regarded as a "controversial client" by clerks at David Strachan & Taylor.

He said he audited Nkobi's books in 1999. After the audit, he was ordered by one of the two partners at the audit to make several journal entries which caused the R1.2 million in loans to be written off.

He said he remembered that the instruction was issued at a meeting between himself, Paul Gering - whom he described as the "tax partner" - and "audit partner" Ahmed Paruk.

He could not remember which of the two gave the instruction, "but the other did not protest".

He said he considered the amount of R1,2 million that disappeared from the company books to be substantial.

He said he had assumed that the write-off had been discussed with Shaik, but this was not done in his presence.

But Francois van Zyl SC, for Shaik, said his client would testify that he was never consulted about the write-off.

"Mr Shaik will say he had no knowledge of this until he received a letter from his bookkeeper, Celia Bester, in December 1999," Van Zyl said.

In re-examination by advocate Billy Downer SC, who is leading the prosecution, Gibb said Shaik had, however, signed the financial statements, reflecting the write-off, in February 2000.

The trial continues.

With acknowledgements to Estelle Ellis and the Daily News.