A former auditing clerk said he was ordered by his boss *1 to write off R1,2-million in the books of Schabir Shaik's Nkobi group of companies.

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

According to the indictment, Shaik is charged with having some of the money paid to Deputy President Jacob Zuma "written off" in the books of Nkobi in the 1999 financial year.

Yesterday, Anthony Gibb's evidence dealt with the fraud charge. Shaik has pleaded not guilty to this charge.

Shaik said he had left the bookkeeping and auditing to those best qualified and that he was informed that the write-off was above board.

The write-off zeroed the loan accounts for Shaik, which included a number of payments made to Zuma; 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 was made.

Shaik also said that when he realised it was a mistake, he ordered that it be rectified.

In 1999, Gibb was an auditing clerk at David Strachan & Taylor. He told the court that when he did the audit, he was informed that the company's financial affairs were to be reviewed by its bank.

As such, he explained to the court, they would have wanted the "most favourable position" to be depicted.

He told the court that Shaik's Nkobi group of companies was regarded as a "controversial client" by the clerks at David Strachan & Taylor.

He said that after he did the audit, he was ordered by one of the two partners at the audit to make a number of journal entries that eventually constituted the write-off. He said he remembered that the meeting was between himself, Paul Gering and Ahmed Paruk.

He could not remember which of the two gave the instructions - "but the other did not protest", Gibb said. "Looking back, I realise that I would have been satisfied to do this, if the partners were. They were my superiors."

Gibb told the court he assumed the R1,2-million write-off had been discussed with Shaik, but it was not done in his presence.

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

In re-examination by advocate Billy Downer SC, who is leading the prosecution, Gibb said Shaik would have benefited personally from the write-off.

Downer also pointed out that Shaik had said he "found out" about the write-off in December 1999 but still signed the financial statements in February 2000.

The trial continues. Dawie Griesel, a strategic consultant for Armscor, is the next witness.

With acknowledgements to Estelle Ellis and The Star.

*1 It is almost impossible to believe that a chartered accountant, registered with the South African Institute of Chartered Accounts (SAICA) and thereby subscribing to the ethics and rules of the Public Accountants' and Auditors' Board (PAAB), would on his own volition commit a criminal act which could see him not only being convicted of such criminal act, but also struck off the roll of accounting professionals.

This is not quite as bad as being cashiered from one's national defence force for conduct unbecoming, but being struck off the roll does tend to have rather severe career and income limiting effects for professionals.