Auditors and accountants blamed

On the third day under cross-examination at his fraud and corruption trial, Schabir Shaik maintained his defence of denial and once again passed the buck to auditors and accountants for the alleged illegal accounting practices at his Nkobi Group.

However, despite his strong views on the competence of the auditors who were involved in the irregular write-off of payments to Deputy President Jacob Zuma as development costs and the creation of a non-distributable reserve, auditing firm David Strachan and Partners are still employed by Shaik's company.

Shaik said he will decide whether to keep the firm as his company's auditors after his trial.

"After the trial is over I will apply my mind, I'm not in the position to do so now," he said.

He told the court he paid the firm a "handsome fee" for their expertise as his accounting knowledge is limited, and he should not be prosecuted for their "ill advice".

Shaik became aware of the write-off from a strongly-worded resignation letter from former Nkobi accountant and state witness Celia Bester.

He said he called for a meeting with the auditors and accountants, where he "introduced the subject matter, set the ball rolling and then left, leaving it in the hands of the auditors".

"I didn't have the competence to deal with the matter, so I left," Shaik said.

When asked by prosecutor Billy Downer why the auditors would have to deceive him, Shaik said: "I don't know, put it to them".

After listening to Shaik's testimony that he signed the financial statements believing the issue was resolved as he did not receive feedback from Bester, Judge Hillary Squires asked, "But you don't know what happened at the meeting; they could have had a game of poker for all we know".

Earlier, Squires reprimanded Shaik twice for disrespectful comments to Downer.

When Shaik told Downer he should pay attention to his answers, Squires reminded Shaik that he is an accused and should control himself.

Shaik also said he did not understand how Bester and his former personal assistant, Bianca Singh, knew that he paid for a Durban flat for Zuma.

When Shaik began to imply that the women lied, Downer told Shaik that he, unlike other accused, was given the opportunity to consult with his legal team during court proceedings and could have disputed their evidence when the women were in the witness box.

Downer accused Shaik of now disputing the women's evidence to suit himself.

Shaik denied this, saying that Singh's duties were restricted to secretarial tasks *1 and he found it difficult to believe that she would know the company's accounting details.

He said Bester has a selective memory, because she could remember the flat rented for Zuma but "chose not to remember" the Floryn Investments account, which was used to make payments to the ANC.

When confronted about the sub-count of tax evasion, Shaik said lying about his qualifications (which he admitted to on Monday) was one thing, but lying about tax is another. He said he has his good and bad aspects but would not jeopardise his company by being involved in fraudulent accounting practices *2.

With acknowledgements to Nivashni Nair and The Natal Witness.

*1 Manure - Bianca Singh was his PA. PAs normally deal with very many everyday administrative tasks on behalf of their principals - like personally delivering splodges of wonga to their principal's beneficiary - right to the military section of the local international airport after a Son of the Earth had just flown in from another diamond-dealing mission in Angola or Sierra Leone.

Poor Bianca was so part of the Benefactor's order of business that she had to go along to Mauritius to assist with a damage control mission with Thomson-CSF's Yann de Jomaron and Alain Thetard. The Benefactor even thought that he was entitled to a splodge of nookie - resulting in a very hastily re-arranged flight schedule.

*2 It is interesting that there are 10 accused on the charge sheet in this case, nine of whom have corporate (juristic) personality and are members of the Nkobi Group. The Nkobi Group has at least another 10 company members and possibly another 20 members. Even the principal shareholder, Accused No. 1 (a natural person) holds equity in Accused No. 2 (Nkobi Holdings (Pty) Ltd) via at least three juristic entities, StarCorp S.A. (Pty) Ltd, Floryn Investments (Pty) Ltd and Clanwest Investments (Pty) Ltd.

One equity holding vehicle is quite normal, but another the other two are obviously special purpose vehicles, almost surely to provide opacity to two occult shareholders, being J.G. Zuma (20% of Clanwest Investments = 2,5% in Nkobi Holdings) and the African National Congress (20% of Floryn Investments = 2,5% in Nkobi Holdings). This is completely congruent with the document stated intention by Shaik to give 2,5% shareholding to Zuma and the ANC as recorded in those early cash-less days circa 1995.

When Dr Mkhize gets on the stand, he should be able to provide some insight into the latter, if not the former.

Mac Maharaj just wanted crispy hand-delivered R100 and R200 notes (plus some computers, an Indonesian marble table and a trip for two to DisneyWorld) for being a good Son of the Earth.