Schabir Shaik's Kobifin company was considered medium risk from an audit point of view, the Durban High Court heard on Monday.

Anthony Gibbs, who was with auditing company David Strachan and Taylor, is in the witness box for the second day in Shaik's fraud and corruption trial.

He was one of the people responsible for Kobifin's annual financial statement in 1999.

Gibbs said the company was solvent but unprofitable because of the high cost of tendering for different projects *1.

He said annual financial statements were usually discussed with the client. However, last week the defence said Shaik had left those statements in the hands of his accountants and auditors, and was not responsible for the outcome of the audit.

Gibbs was taking the court through the various documents used during the auditing process.

His testimony relates to the second count of fraud in which the State alleges that R1,2 million was irregularly written off as development costs, the creation of an non-distributable reserve, and the revaluation of assets.

Shaik has pleaded not guilty to two counts of fraud and one of corruption.

With ackowledgement to Sapa.

*1 Giving assorted donations to a range of national and provincial government ministers and to the ruling political party each time one tenders, tends to have a high associated cost, exacerbated by the high cost of the imbibition of Johnny Walker Blue Label while pondering over which encoded donation declaration to use this time or which special purpose vehicle to use next time.