The Durban High Court heard on Tuesday that the creation of a non-distributable reserve and the rights of three loan accounts in the books of Nkobi Holdings went beyond the accounting knowledge of fraud and corruption accused Schabir Shaik.

"It clearly relied on the auditors and his accountant to produce a set of accurate financials and that is what he thought he eventually signed," defence advocate Francois Van Zyl said.

Discussing the charge of fraud against Shaik, Van Zyl said the State failed to prove beyond reasonable doubt that Shaik had signed the 1999 annual financial statement for Kobifin, one of the subsidiaries of Nkobi Holdings, with the intention of defrauding anyone.

Van Zyl said Shaik had also not made any misrepresentation to a bank, the SA Revenue Service or shareholders through his financial statements.

Nor had Shaik made any misrepresentation to any Nkobi accounting staff by means of instructions by the auditors to pass the relevant journal entries as alleged.

Van Zyl called on the court to find Shaik not guilty on the charge of fraud as well the alternative to that charge -- that he had contravened a section of the Income Tax Act which relates to evasion.

"The only result of the write-off is that accounting evidence of the loan had been written off," Van Zyl said.

Van Zyl is expected to deal later with count three of the corruption charges, which involves the alleged soliciting of a bribe for Deputy President Zuma.

Earlier Van Zyl complained to the court that parts of his closing arguments, which had not yet been dealt with, had appeared in weekend newspapers.

"I assume they had access to your arguments," said Judge Hillary Squires.

Van Zyl replied that he was not sure whether the media had gained access from his team or some other source, but there was an undertaking by journalists that they would only write what had been covered in court.

"I didn't read it," said Squires, referring to the reports.

He told Van Zyl if there was something that he (Squires) should not know, Van Zyl should just assume that he did not.

Referring to the payments made by Shaik on behalf of Zuma, Van Zyl said they could not be seen in isolation but that the court had to consider the history between the two men.

He also dealt with Zuma's intervention when French arms company Thomson CSS (sic) believed that Shaik's Nkobi group of companies would not be a suitable BEE partner in South Africa's arms acquisition process.

According to Van Zyl, Zuma, "as part of the ANC leadership, helped a loyal ANC member to dispel a rumour".

The defence is expected to wrap up its closing argument on Wednesday.

With acknowledgements to Sapa.