Witness tells court Shaik hid changes in the company's financial statements from her because he knew she would object'

The defence team of fraud and corruption-accused Schabir Shaik took on the damning testimony of his former financial manager, Celia Bester, in the Durban High Court yesterday, but failed to land any telling body blows.

Bester stuck to her guns during a day of cross-examination by Adv Francois van Zyl on her earlier claims that payments Shaik made to Deputy President Jacob Zuma amounted to bribery, and that treatment of the payments in the financial statements of the Nkobi Group constituted serious irregularities.

Bester testified on Tuesday that she resigned from Nkobi after she became aware that the changes had been made to the financial statements without her knowledge.

The changes created a nondistributable reserve on the balance sheet, against which R1,2m in payments to and on behalf of Zuma were written off as fictitious development costs for an Nkobi-linked company.

She believed Shaik had hidden the changes from her because he knew she would have objected.

Responding to Van Zyl's reference to the alleged agreement between Zuma and Shaik that Zuma would pay back the R1,2m at the prime interest rate plus 2%, Bester yesterday insisted that if there was such an agreement, she should have known about it. If she had, she would have created a journal entry under the heading "loan account *1 Zuma" to record payments to the deputy president, instead of accounting for them as expenses. She would have recorded repayments by Zuma, of which she had no knowledge. "I was not told it was a loan account they were just expenses."

Bester believed Nkobi, struggling to manage its R450000 overdraft, was in no position to lend money.

During the cross-examination, however, Van Zyl extracted concessions from Bester that:

The bribery claim was based on inference and her personal opinion, and nothing more substantial ;

If she had known about a loan agreement, which the defence claims exists between Shaik and Zuma, she would have viewed the payments as "more above-board *2 ";

Though she believed Shaik was aware of late changes to the financial statements, which resulted in the Zuma payments being written off, she had no knowledge this was discussed at meetings between Shaik and his auditors;

She was not aware Shaik had specific accounting expertise *3; and

Shaik had expressed concern that Nkobi accounts should be accurate.

Wrapping up his cross-examination, Van Zyl said Shaik would testify he never attended meetings where the R1,2m write-off was discussed, and the R3,2m nondistributable reserve was discussed in Nkobi's financial department before Bester resigned.

Bester responded that even if Shaik was not aware of the write-off, he had signed off the 1999 financial statements and, in terms of his fiduciary duties as a company director, had to accept final responsibility.

Under re-examination by prosecutor Billy Downer, she said that despite Shaik's concern that "Nkobi accounts be accurate", he was not involved in the day-to-day financial accounting.

With acknowledgements to Kevin O'Grady, Nicola Jenvey and the Business Day.

*1 Accounting according to GAAP.

*2 "More above-board" does not make the benefit legitimate, nor sufficiently "above-board". Even if there was a loan agreement, the terms of the alleged agreement are so benign to the beneficiary (being a public official in high public office), that its benefits are not due (unlawful).

*3 Accounting "expertise" specific to the struggle - Viva. *4

*4 Accounting for BEE and those Struggling Against GAAP by Steenkamp, Boesak, Yengeni, Madikizela and Shaikh *5

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