Shaik 'a generous contributor' to the ANC

Schabir Shaik was a major and "most generous" contributor to the ANC, donating more than R2 million to the party in one year. This was the evidence yesterday of KwaZulu-Natal Finance Minister Zweli Mkhize, who took the witness stand at the resumption of Shaik's fraud and corruption trial.

In contrast to Shaik - who is driven to the steps of the Durban High Court every day in his luxury car - the minister walked to court through Durban's city centre.

Although surrounded by bodyguards, his low-key arrival even caught security personnel at the court off-guard.

Shaik is charged with one count of fraud - for illegally writing off R1,2 million in the books of his Nkobi group of companies - and two counts of corruption.

The one count relates to an alleged bribe which Shaik is accused of procuring from arms deal preferred bidder Thomson CSF for Deputy President Jacob Zuma.

The other relates to a generally corrupt relationship between the politician and the businessman.

Shaik has admitted to making payments to Zuma, but said this was done out of friendship.

Defence advocate Francois van Zyl SC called Mkhize in an attempt to show how Shaik had financially supported the ANC and had made several donations.

Mkhize described Zuma as being "at the core" of peace talks between the ANC and IFP between 1994 and 1999 and how he and other leaders were subjected to threats.

He said that while ideally there should have been police protection, this had become politicised and several leaders had chosen to hire private security.

"The ANC did not pay for this . . . we looked for sympathetic supporters.

"There were also many social issues that the ANC had to deal with, such as people being relocated because of the violence. For this, too, we had to rely on financial help from donors."

In fact, Mkhize said, the party leaders relied on donations for travel costs and for relocation expenses when there had been threats against their lives.

Shaik, he said, had also assisted Walter Felgate, the IFP MP who defected to the ANC and who had needed a safe place to live.

A document before the court shows that in one year, Shaik had donated R1,2 million to the ANC, with promises of a further R1 million.

The state alleges that Shaik used one of his companies, Floryn Investments, to hide payments he had made to Zuma.

But Mkhize said that, to his knowledge, Floryn had been a shelf company used by Shaik as an "accounting platform" for donations he made to the party.

It also emerged during evidence that Shaik had never repaid all of a R1 million donation from former president Nelson Mandela which, instead of going to the Development Africa Trust, had been used to offset an Nkobi company overdraft.

Mkhize explained that the trust, of which he and businessman Vivian Reddy were trustees, wanted to use the money to upgrade the Zulu royal household.

But then he discovered that Shaik had withdrawn it from Zuma's account "because he did not want it taken up by Zuma's overdraft".

Shaik had written out four postdated cheques for R250 000 each, but then stopped payment on three of them. After negotiations, Shaik ultimately only paid R500 000.

Under cross-examination by state advocate Billy Downer SC, Mkhize was unable to explain why, four years later, Shaik had not yet paid back the balance to the trust.

"I know Reddy sent him a letter of demand . . . we need to reconcile what he owes us."

The state alleges that the repayment of the money is linked to the alleged bribe from Thomson CSF.

The trial, before Judge Hilary Squires and two assessors, continues today.

It is likely the defence will close its case this week and argument will be held on April 18.

With acknowledgements to Estelle Ellis and The Mercury.