Suggestions by Durban businessman Schabir Shaik that French arms company boss Alain Thetard stole money meant for deputy president Jacob Zuma are laughable.

Billy Downer, lead counsel for the State, said this in Shaik's Durban High Court trial for fraud on Monday.

Downer was asking Judge Hilary Squires to allow an encrypted fax as evidence.

The document ostensibly links Shaik, Zuma and a former South African director of French arms company Thomson to an alleged bribe agreement.

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

He has insisted that he had no part in a conspiracy to bribe Zuma and that the State was misconstruing correspondence dealing with a donation to the Jacob Zuma Education Trust.

"There has also been a suggestion that Thetard decided to steal the money. Is that remotely possible?" Downer asked. "My Lord, it is laughable," he said.

"My learned friend (Shaik's counsel Francois van Zyl) has sought to make Alain Thetard a liar and a scoundrel," Downer said.

"But even liars and scoundrels sometimes tell the truth."

Downer argued that the risk of the fax being a lie was negligible. He said there was no reason to believe that Thetard would create a false document.

Thetard has said in a separate document that the document contained some thoughts he had put on paper and later discarded.

Downer argued that this is what they would have expected him to say.

"Obviously he is going to deny it. His denials only strengthen the State's case."

Downer said that the court would be seriously hampered in judging the State's case if the fax was not admitted into evidence.

Van Zyl has objected to the fax being used as evidence. He says it is hearsay as Thetard, who wrote the fax, refuses to come to South Africa to testify.

Both sides agree that there was a series of discussions, letters and meetings between Shaik, Zuma and Thetard. They agree that the request had something to do with money for Zuma, that it was conveyed through Shaik and that it had to be cleared by Thomson headquarters.

The State has drawn the conclusion that the request was for a bribe.

Downer argued that this would fit in with the way Thomson and Shaik did business.

Downer said that the fax was written at a time when the issue of the arms deal investigation was current.

"Given Thomson's history of perceiving that political influence protection and intelligence were important and that they perceived Zuma had and would be able to continue fulfilling a role in this, it is not surprising that Zuma's name should be mentioned in the fax," Downer said.

With acknowledgements to Estelle Ellis and the Cape Argus.