The claim came as part of an all-out assault on the pillars of the state's case in the Durban High Court yesterday during cross-examination of the state's star witness, forensic auditor Johan van der Walt of KPMG.

Correspondence and meetings between Zuma, Shaik and Thomson-CSF officials were nothing more than attempts by Shaik to facilitate a donation by the arms company to the Jacob Zuma RDP Education Trust, Shaik's defence lawyer, Francois van Zyl, said.

It is crucial evidence, contradicting the state's portrayal of the events as being designed to secure a R500 000-a-year bribe for Zuma, in return for protection in investigations into government's multi-billion-rand arms deal.

Van Zyl also took aim at the notion of the encrypted fax allegedly sent by Zuma to Thomson-CSF's head office in Paris to confirm his acceptance of the conditions of the bribe. The bribe is alleged to have been discussed at a meeting in Durban between Shaik, Zuma and Thomson-CSF's sales director for Africa, Alain Thetard, on March 10 2000.

Shaik, Van Zyl said, would testify that a donation to the Jacob Zuma Education Trust was discussed at the Durban meeting, and it would make no sense to encode a fax confirming the discussion since there were "only three of them present" at the meeting and they "discussed everything openly".

The alleged recipient of the fax, Thomson-CSF's sales director for Africa, Yann de Jomaron, attended a meeting in Pretoria of shareholders and directors of African Defence Systems (a joint venture between Thomson and Shaik's Nkobi Holdings) three days before the fax was alleged to have been sent.

This called into question the credibility of testimony by Thetard's former secretary, Susan Delique, that the fax was indeed sent to de Jomaron in Paris, Van Zyl said.

Van Zyl said Shaik would tell the court he was in an "embarrassing" situation, having promised Zuma that donations for the trust would be forthcoming from the French, but failing to deliver.

Van der Walt questioned the fact that these donations were never referred to explicitly in Shaik's correspondence when "usually a donation one can be proud of wouldn't be regarded as a secret".

The issue of a payment made to Nkobi in terms of a service provider deal with Thomson also came under fire. Van Zyl insisted it was purely intended for Nkobi to undertake research into potential new projects* for Thomson-CSF. The arms company was bound by its corvette contract to also create counter trade investment opportunities.

"Thomson-CSF was waiting for Nkobi to earmark projects, complete its investigations and fulfil its obligations in terms of the service provider agreement." Shaik's testimony would signal Thomson-CSF never made a second payment, as Nkobi had not delivered on its counter-trade opportunities.

Earlier yesterday, Judge Hilary Squires refused an application by the state for a witness, John Lennon, to testify from the UK by video conference.

With acknowledgement to Kevin O'Grady, Nicola Jenvey and Business Day.

*   I can't think of any other company receiving a legitimate fee from a foreign bidder to genuinely research DIP and NIP opportunities. In any case, all the DIP Thomson required was secure in the local content of the combat suite.

Regarding NIP, Thomson merely had to liaise with the Department of Trade and Industry who had lists of potential opportunities from which to choose.

Altech Ltd, who had just sold Altech Defence Systems (Pty) Ltd (ADS) to Thomson-CSF for about R80 million (for which there must have been a really good reason in the light that a R2,6 billion contract had already been guaranteed to Thomson-CSF by Deputy President Mbeki before the sale took place), already had NIP projects in terms of ABB (see *2, *3, *4 and *5, ) and other projects.

By the time the "service provider" agreement was set in place, Thomson-CSF had already secured its contract, including the DIP Terms and the NIP Terms.

Also, by the time the "service provider" agreement was set in place, Thomson-CSF had clear channels of communication with by now President Mbeki. He hadn't been shy (secretive - yes) about advising Thomson-CSF on suitable BEE partners in the negotiation phase of the Corvette contract, so he could just as easily have advised Thomson-CSF about suitable NIP projects - like Coega and condom factories and AIDS cures, etc.

In short, it was not only highly implausible that Thomson-CSF had to pay Nkobi Holdings a research fee to find suitable NIP projects, but there were far better placed organisations than Nkobi Holdings in order to find such projects.

After Thomson-CSF purchased 100% of the company in early 1999, they changed its name from Altech Defence Systems (Pty) Ltd (ADS) to African Defence Systems (Pty) Ltd (ADS).

*2 Sweeteners on the Trigger

"Procurement of electricity components in SA and export by SA-based multinational ABB of locally made power transformers;"

ABB Powertech Transformers, based in Pretoria West, is jointly owned by Power Technologies Limited (Powertech), the largest power-electrical group in Southern Africa, and Asea Brown Boveri (ABB).

Powertech is part of the Altron Group which includes Altech Ltd.

*3 The Question of How Conlog was Flogged

"Sale of Joe Modise's offset company raises eyebrows

"Modise has long since severed ties with Conlog, an IT and electronics group, but he was Defence Minister at the time the arms deal and its offset investments were negotiated.

"Conlog, which manufactures hardware and software for prepaid water and electricity meters, is to form a joint venture (JV) company with ABB SA, which is part of global electronics group ABB. The JV company will be responsible for producing pre-payment electricity meters and solar power technology for the domestic and export markets."

*4 Say It Ain't So, Joe

"Where Conlog would have benefited was through an industrial participation project, offered by BAe/Saab, where Conlog would have gone into a joint venture with ABB, a Saab sister company, to produce pre-payment electrical meters and solar power manufacturing.

"Apart from that - seemingly outside of the defence deal - ABB and Conlog also entered a separate agreement in early 1998 for ABB to market Conlog pre-paid electricity meters abroad."

*5 ABB

ABB has been charged for bribery in the Lesotho Highlands Water Project case.

*6 Corruption Busting : Lesotho in Brave Fight Against Graft