He tells court he took R900 000 of Mandela donation to Zuma for his company's use

In a week of high tension, confusing dates and figures, Schabir Shaik's most commonly used words in the witness box at his fraud and corruption trial were: "I do not know anything about it M'Lord."

But on Friday, Shaik had no one to blame when asked if he had taken R900 000 for his own use from the R2 million donation by Nelson Mandela to Deputy President Jacob Zuma's RDP Education Fund and Development Africa, a trust set up to assist with renovations at one of the KwaZulu-Natal royal houses.

Half went to the Education Fund while the other million remained in Zuma's account. Shaik said he knew nothing of Development Africa so when he saw R1 million in Zuma's account, he transferred R900 000 into a call account to accumulate interest and left R100 000 to pay off the overdraft.

The R900 000 was later transferred to Shaik's Nkobi group, where the funds where "utilised".

The court heard that Shaik's position as Zuma's "ecomomic adviser and very close friend", allowed him unlimited access to his bank account.

Last year, a state witness, KPMG forensic auditor Johan van der Walt, produced evidence suggesting Zuma may have not been aware of the transfer, as two months later he made out a R1 million cheque to Development Africa. A week later Shaik stopped the payment.

In his plea explanation, Shaik told the court that he knew of the R2 million donation but he did not know what Development Africa was. Later, he learnt the money was for "confidential ANC activities".

Shaik said that to raise money to repay Zuma he entered into a service provider agreement with French arms manufacturer Thomson-CSF, in terms of which Nkobi subsidiary Kobifin was to identify investment projects to Thomson-CSF.

Shaik was to receive a payment of R500 000 in two instalments.

In the contract, two additional payments of R250 000 were added by hand underneath the typed references to payment of R250 000, making the total amount payable R1 million.

The state claims the agreement was to disguise the bribe that Shaik allegedly facilitated from Thomsons-CSF to Zuma in return for protection from the arms deal probe.

However, Shaik said yesterday that statements on the agreement, like "Kindly expedite our arrangement as soon as possible, as matters are becoming extremely urgent with my client", were to emphasise that Zuma needed the donation urgently and that "conflicts with intention" *2 meant that a clause in the agreement conflicted with his business style.

He said that when he wrote to Thomson-CSF's South Africa boss Alain Thetard in December 2000, the statement, "I can give effect to its intended purpose before we close", meant that the intended purpose was the donation to Zuma's education trust.

The state claims that the intended purpose was, in fact, the bribe to Zuma, who was at that stage "strapped for cash" for his traditional village at Nkandla.

Evidence before court shows that Thomson-CSF only paid Shaik R250 000 of the intended R1 million. Therefore, Development Africa was not repaid the full R900 000.

Shaik's advocate, Francois van Zyl, said he intends to question Shaik for "one or two hours" on Monday before cross-examination. *3

With acknowledgements to Nivashni Nair and The Natal Witness.

*1 Exactly - mainly funding ruling party executives personal lifestyles using funds derived from foreign companies getting national and local business.

This is called corruption.

*2 Made alongside the anti-bribery stipulation, the later of which is probably a consequence of the OECD's Anti-Bribery Regulations.

Bad news though, is that the concept of the Service Provider Agreement is in itself a vehicle used by Thales to circumvent the OECD's Anti-Bribery Regulations once the latter were promulgated in Europe.

This was in order to stop the up-until-then open and wholesale bribery of foreign officials by the likes of Thomson-CSF (Thales's predecessor in name) and British Aerospace (BAE Systems's predecessor in name).

The American's had cleaned up their act with their Foreign Corrupt Practices Act of 1977, amended in 1988, and were now getting "die moer in" with the Europeans who were getting all the business because they were under no such constraints.

Indeed, this is surely the one main why only European companies were allowed to bid during the Arms Deal.

*3 And then the Olympic Games of determining the truth by means of adversarial cross-examination begin

Let The Games begin.