French arms dealer tells of repeated requests by Schabir Shaik for financing for his companies

A new version of events that took place at a key meeting in March 2000 between local businessman Schabir Shaik, Deputy President Jacob Zuma and French arms contractor Alain Thetard was presented at the Shaik trial yesterday.

A copy of a letter written by Thetard to his boss, Jean-Paul Perrier, a senior member of French arms group Thomson-CSF, is potentially damaging evidence against the Durban businessman, as it contradicts the version his defence counsel, Francois van Zyl, has signalled Shaik will describe.

Shaik has pleaded not guilty to two counts of corruption and one of fraud. The state alleges he paid R1,2m to, or on behalf of, Zuma, and solicited a R500 000 annual bribe from the French arms company in exchange for protection during the investigation into alleged arms deal irregularities.

Thetard's version constitutes a virtual appearance of the French arms dealer in the trial following unsuccessful attempts by the Scorpions to get him to testify.

During these negotiations, Thetard made an unsolicited statement to Scorpions investigator Gerda Ferreira. In the statement, he said:

"I confirm to you that I met J Zuma in Durban during the first quarter of 2000 (I cannot remember the exact date) at his official residence, together with our local partner, Schabir Shaik." Thetard said the purpose of the meeting was to verify the credibility of "our Durban establishment".

Thetard denied that at any time during his stay in Durban he had refused any request "from highly placed state personalities, civil servants or employees of state-owned companies".

"I confirm to you that, during my stay in SA, I have been the object, in a repetitive manner of requests on the part of our partner, Schabir Shaik, for the financing of his firms.

"Although I did not act on these requests, it was possible that, at times, I could have wondered about the real causes regarding such demands, taking into account the local context." Evidence earlier in the day alleges that Zuma owes Shaik R2,2m in capital and interest, after the state's key witness, KPMG forensic auditor Johan van der Walt, reappeared on the stand to present new interest calculations.

During his 16 days on the stand last year, Van der Walt testified that if Zuma intended using his pension to repay, with interest, the R1,2m he received from Shaik, there would not be much left for his retirement.

Zuma and Shaik have a revolving loan agreement *1, dated May 16 1999 and lodged in the confidential members' register in Parliament, in terms of which the deputy president is to repay the money at the prevailing prime lending rate plus 2%.

The agreement appeared to undermine the state's allegation that the money constituted a bribe aimed at securing Shaik's Nkobi Holdings network a slice of the state's multibillion-rand arms deal.

However, the interest terms were not outlined and, in Van der Walt's initial evidence, he calculated and compounded the interest daily. By last June, the interest exceeded the capital amount.

Yesterday, Van der Walt entered newly calculated interest payments, with interest compounded monthly and annually.

Compounding the interest monthly sliced R121 000 off the bill, and annually, more than R180 000. "The most conservative estimate is that Zuma owes Shaik R2,2m (as at the end of November last year)," Van der Walt said.

With acknowledgement to Tim Cohen, Nicola Jenvey and Business Day.

*1 The state has contested both the veracity and admissibility of the "Loan Agreement" as only recently faxed copies have been submitted as evidence. The original is supposedly buried deep in the confidential part of the Parliamentary Register of Members' Interests and hitherto inaccessible to event those with a warrant for its arrest. The two financial clowns never thought of making proper, let alone certified, copies of a R2,0 Million Revolving Credit Agreement.

But nevertheless, providing this amount of finance, especially if it was interest-free and on such a long term and benign basis, is still highly untoward when one party is a businessman bent on securing government contracts, both of a national and provincial nature, while the other party is a government minister, both of a national and provincial nature - and is probably unlawful.