Durban - The controversial R1.3 billion arms deal subcontract awarded to a company in which Durban businessman Schabir Shaik's company held an interest is set to come under the spotlight in Shaik's trial this week.

In the next few days KPMG forensic auditor Johan van der Walt is poised to reveal more of his 250-page report into the goings-on at Shaik's Nkobi group of companies. The highlights to be put into evidence before court would include:

The controversial combat suite contract that was awarded to a consortium in which Nkobi Holdings held an interest.

More details of Nkobi's cashflow problems.

A detailed account of the payments made to, or on behalf of, Deputy President Jacob Zuma.

A detailed analysis of Zuma's financial position.

An analysis of Shaik's financial position.

On Thursday and Friday last week, Van der Walt explained to the court that auditors had found a number of unsigned letters on Nkobi Holdings' computers, containing a number of statements for which no proof could be found. These included references to Shaik's close links with the ANC and statements that his company held the majority shareholding in an arms company.

Van der Walt also said Shaik had made it clear in his correspondence that he believed he could influence government tender procedures.

When the court adjourned on Friday, Judge Hilary Squires told Van der Walt that he must "rest his voice" over the weekend as he was going to be "talking all of (this) week".

So far, state witnesses have painted a picture of Shaik coming from the struggle into a democratic South Africa, and building up his Nkobi group of companies - named after ANC treasurer Thomas Nkobi.

As a "black economic empowerment company", Nkobi Holdings then joined the fray for lucrative government contracts.

State witnesses and letters discovered by the Scorpions suggest that what Shaik said his company had to offer was "political connectivity". Van der Walt also said that there was a link between the first payment made to Zuma and his first efforts to help Nkobi Holdings.

Initial plans jotted down in a yellow notebook in 1994 seem to indicate shares in the Nkobi group of companies would be allocated to Zuma, and possibly through a nominee shareholder. Van der Walt said they could never prove that shares were distributed like this.

What they had found was that Zuma had been in financial trouble from January, 1995. He could not pay his mortgage nor other debts, and legal proceedings were instituted against him.

Shaik presented himself as Zuma's financial adviser, but only paid Zuma's debts. Zuma's financial position also did not improve.

Van der Walt said Shaik and Nkobi paid R1.2 million to Zuma between 1995 and September 2002. "We understand that this practice continued after September 2002."

He also said that "there are no indications that Shaik financially assisted Zuma in a period prior to the time when the Nkobi group came into existence".

He said the payments made little business sense as the Nkobi group funded its activities on overdraft.

Shaik has pleaded not guilty to two charges of corruption and one of fraud.

The trial continues today.

With acknowledgements to Estelle Ellis and the Cape Times.