Durban businessman Schabir Shaik only ordered that written-off loans be reinstated in his company's books after the missing money was discovered by the Scorpions.

This was the evidence by auditor Ahmed Paruk, who yesterday continued his testimony in Shaik's fraud and corruption trial in the Durban High Court.

Shaik has admitted that the transactions were reversed after this was discovered by the Scorpions, but says it was because he had been ill-advised about it before then.

Paruk, a chartered accountant and partner at the auditing firm David Strachan & Tayler, gave evidence relating to a fraud charge against Shaik. Shaik has pleaded not guilty to both this charge and two others of corruption.

It is alleged that Shaik asked for loans of R1.2 million to be written off in his company's annual financial statements for 1999. These loans allegedly included money paid to Deputy President Jacob Zuma.

Paruk, the partner overseeing the auditing of Nkobi's books for the 1999 financial year, told Mr Justice Hilary Squires that Shaik had said to him that there was "no way" in which he owed all that money (reflected in his loan account) to the company.

"He said it must have been an accounting mistake," Paruk said. He further testified that Shaik had said the money ostensibly owed by Floryn and Clegton, other companies of Shaik's, were "clear errors" as well.

He said he had known that Shaik was Zuma's financial adviser. Subsequent to the 1999 audit he had found out that Shaik had made certain payments to Zuma.

He recalled a conversation with Shaik where Shaik had told him that he had obtained cession of Zuma's pension, as repayments of Zuma's debt to Shaik.

"You are not allowed to cede a pension," Paruk said, responding to a question by Judge Squires.

During cross-examination by advocate Francois van Zyl SC, for Shaik, Paruk said he had accepted Shaik's explanation that the amounts had been allocated in error. He said the firm had taken steps to have the situation corrected after he was questioned by the Scorpions.

Van Zyl said Shaik would tell the court that he had been assured that the write-off was in order and had no tax implications. He also said Shaik would deny that he had asked for the amounts to be written off.

"Mr Shaik will say that he did not have a cession of Zuma's pension," Van Zyl replied. "He did, however, always look at Zuma's lump sum pension payout for repayment of his debt."

The trial continues.

With acknowledgements to Estelle Ellis and the Cape Argus.