Deputy President Jacob Zuma could owe fraud and corruption accused Schabir Shaik up to R2m well into his presidency if he becomes SA’s next leader as scheduled in 2009.

The extent of Zuma’s indebtedness was outlined in the Durban High Court yesterday as Shaik spent a second day in the witness box. He told the court he was still assisting Zuma financially “to this day”.

Shaik also sought to explain payments totalling more than R1m to Zuma and his family.

The businessman, who has pleaded not guilty to two counts of corruption and one of fraud, is facing a charge of corruption arising from the multibillion-rand arms-procurement programme.

Shaik is alleged to have solicited an annual R500 000 bribe for Zuma from French arms company Thomson-CSF.

The bribe was to protect the company from investigations into the arms deal and for Zuma’s help with future arms projects.

Shaik explained the payments were due to the “dire financial situation” in which Zuma found himself, extending well into his term as deputy president.

Asked by his counsel, Francois van Zyl, whether the payments had stopped after the investigation into the current trial had begun, Shaik said they had continued and that he and Zuma had agreed to extend a R2m “revolving-loan agreement” for another five years, after it expired in May last year.

Earlier in the day Shaik had said he classified Zuma’s loans either as personal or as donations to the African National Congress, (ANC) for which he “never expected repayment *1”.

He said former president Nelson Mandela had offered to “help extinguish” Zuma’s debts, believing the financial problems were “distracting him from his duties in the ANC”.

The revolving-loan agreement was outlined in a document presented in court and apparently signed in 1999, shortly before Zuma was appointed deputy president.

Shaik has testified that repayments have been made, but it is common cause that much of the original loan remains outstanding.

The extension of the revolving-loan agreement holds out the real possibility that Zuma could become president still owing Shaik money.

However, Shaik said his attitude to the loan was relaxed and he had not nor would he insist it was repaid as he considered the money “an act of friendship”.

He said the agreement, coupled with an interest rate of 2% above prime, was reached at Zuma’s insistence.

A document, apparently setting out the terms of the deal sparked an exchange between Van Zyl and prosecutor Billy Downer, who said the state disputed the authenticity of the document.

The document is a copy of an original, which Shaik said he assumed Zuma had submitted to government authorities in charge of maintaining the register of assets of executive members.

Van Zyl argued his client had testified the document was an exact duplicate *3 and that a copy was being submitted, because the original could not be found.

No decision has yet been taken on its admissibility.

Judge Hillary Squires reacted with incredulity to Shaik’s testimony that even after becoming deputy president Zuma had trouble balancing his income and expenses.

The judge reminded Shaik yesterday that Zuma was “already the deputy president”.

Shaik responded: “I wait for the day the ANC does become cash flush, so they don't have to be in such a precarious position.”

Several times yesterday Shaik appeared stumped *4 by questions asked by his own counsel.

At one point Van Zyl asked a particularly tricky question about why Shaik had not included the revolving-loan agreement as a liability when applying for an Absa bank account for Zuma.

Shaik said that including the amount would have “produced a very negative picture”, to which Squires interjected: “So you wilfully withheld information *5.”

After pondering the question, Shaik said he “did not feel in (his) heart *6 this was a liability”.

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

*1 I classify non-interest bearing, non-repayable loans as gifts - any opposing views?

Giving gifts of money to politicians and politicians giving gifts of favours and support is commonly called bribery or corruption.

In effect, this is very, very close to an admission on Count No. 1 - although Adv van Zyl is steering well clear of the reciprocity.

*2 Where did this money (R2 million) come from?

1 Disposable after-tax income earned between 1994 and 1999?
2 From Alfred Nobel?
3 From Thomson-CSF via Yusuf Surtee?
4 None of 1 to 3 above?
5 All of 1 to 3 above?

*3 And the moon is made of cheese.

*4 Like most of the questions asked in the 1987 National Diploma in Electrical Engineering - Light Current, but not in the 1990 Masters Diploma in Technology in Electrical Engineering - Light Current High Voltage Engineering T5 exam - because he had a exam book full of pre-completed answers.

*5 It's going to be a loooooong two weeks with Adv W.J. Downer SC.

*6 The unfortunate reality is that when in the witness box, answers have to come from the head and not the heart.