A private forensic expert for the defence in the Schabir Shaik fraud and corruption trial, Gregory Johnson, told the Durban High Court on Tuesday it was not unusual for directors to take huge amounts of money from their companies.

"It's very seldom that you actually find a director taking nothing out of a business," said Johnson.

He said the amount taken was determined by tax, not by cash, and that it was "not unusual" to take anything between R300 000 and R600 000 a year.

He was referring to the loans Shaik had taken from his Nkobi group of companies which he used to support his friend, Deputy President Jacob Zuma.

Johnson said the money could be taken as a salary or a loan.

According to Johnson, Shaik and his Nkobi group of companies had paid out a sum of R888 000 to or on behalf of deputy president Jacob Zuma.

The state believes Shaik bankrolled his friend to the tune of at least R1,2 million and that the money was used for, among others things, school fees for his children, money for his wife when he was not around and car payments.

In his report the state's forensic auditor Johan van der Walt stated that Nkobi had run into financial difficulties and an overdraft because of the payments to Zuma.

At the start of his testimony Johnson said that the negative cash position of Nkobi, which received a small injection from Shaik during its start-up, was not unusual.

"Had they made no payments to Zuma I contend that the overdraft would be the same."

Under cross-examination he agreed with prosecutor Billy Downer, when it was put to him, that cash management for a company at an early stage was critical.

Johnson also said it made no business sense to just pay out money *1 and that the money to Zuma could have been invested in other projects.

However, he also said that if the overdraft in the Nkobi group was directly linked to the Zuma payments, it would be expected that "as cumulative payments to Zuma went up, so would the overdraft."

He said in 1999 payments to Zuma were in the region of R500 000 and Nkobi had a positive cash status "somewhere between R400 000 and R2 million."

Johnson, who sat through most of Van der Walt's testimony, was given the task of investigating certain aspects highlighted by the prosecution's forensic auditor.

In his analysis of the financial documents, he said he compared the effect of the payments on Nkobi's turnover *2, while Van der Walt compared it to Nkobi's overdraft *2.

Judge Hillary Squires asked Johnson if the write-off of R1,2 million in the books of Shaik's company and the creation of a non-distributable reserve was done to reflect better financial statements to present to the bank to renew their overdraft.

Johnson replied: "They did it in a crude way," and that it should have been reflected in the annual financial statements for the year 2000 not in the 1999 statements.

Van der Walt was back in court for Johnson's testimony but only to advise the state in its questioning.

The hearing continues on Thursday.

With ackowledgements to Wendy Jasson da Costa and Sapa.

*1 It makes absolute business sense if this is the way an entity gets its business, eh Mac?

*2 It is unadulterated nonsense to make a comparison to turnover; it only makes sense to compare it to the differential between turnover and the total cost of doing business, i.e. the nett profit. The aggregate effect of nett profit is reflected in the bank accounts, either cash positive or cash negative (overdraft).