An accountant told the Durban High Court he carried out his superiors' instructions relating to an allegedly irregular write-off by one of fraud accused Schabir Shaik companies, even though he didn't understand "the rationale behind it".

Anthony Gibb, who conducted the 1999 audit at Shaik's Nkobi group, said he was told what to do in relation to the write-off on Kobifin's books by audit partners Paul Gering and Ahmed Paruk of David Strachan Taylor and didn't understand the details.

Shaik's fraud charge is in connection with R1,2 million allegedly irregularly written off as development costs for Prodiba, which Nkobi joined and worked with on the driver's licence conversion contract.

The state also claims that a revaluation of shares by selling work-share from Kobifin to KobiIT with a R3,5 million profit, and the creation of non-distributable reserve, defrauded other shareholders and inaccurately reflected the company's position.

Gibb testified that the Nkobi group was considered "medium risk", as it was technically solvent but not profitable.

He said that without the write-off, the company would have become "technically insolvent" due to the loss of about R1,4 million and the inability to recover loan accounts.

Defence advocate Francois van Zyl rejected the state's claims that Shaik was party to the write-off.

He argued that his client left the accounting books to the auditors, who were responsible for the write-off.

Shaik found out about the write-off from his accountant's resignation letter months after the audit, Van Zyl said.

Although Gibb proved to be forgetful during cross-examination, he said auditors usually discuss issues with a client during the process.

He did remember a meeting with Shaik, the auditors and Nkobi financial director Colin Isaacs, but could not remember if the write-off was discussed.

He said Shaik was regarded as a controversial client due to his political connections.

Armscor strategic consultant David Gressel (sic - Griesel) will be in the witness box on Tuesday. His evidence will relate to the corruption charge against Shaik.

With acknowledgements to Nivashi Nair and The Natal Witness.