The Durban High Court on Monday heard how fraud and corruption accused Schabir Shaik used one million rand which Nelson Mandela donated to the Zulu royal household and only paid back half the money.

This was the testimony of KwaZulu-Natal's finance MEC, Zweli Mkhize, who previously also served as provincial treasurer-general for the African National Congress.

Mkhize said the money was supposed to go to Development Africa, a trust fund which was set up to deal with welfare issues not strictly in the budget of the African National Congress.

Initially Mandela gave two million rand to Deputy President Jacob Zuma --one million for the Jacob Zuma RDP Education Trust Fund and the other million for the royal household.

Previously the state's forensic auditor, Johan van der Walt, told the court that Zuma gave one million to his Education Trust Fund but that the other million which was still in his account was used by Shaik, his financial advisor in his Nkobi group of companies.

On Monday Mkhize also told the court that Shaik was unaware what the money was intended for and used it for other purposes.

Shaik later gave Development Africa four cheques of R250 000 each of which only two were cashed.

Mkhize said the trustees of Development Africa were not "uncomfortable" with the idea that Shaik still owed R500 000 because he had previously also done fundraising for the royal household and there was no dispute about the money.

Shaik had been told that Development Africa would take the money when it was needed.

Mkhize said by that time the refurbishment of the royal household had already been taken over by the Department of Public Works.

When Shaik gave evidence in his trial he told the court that when he saw the R1 million in Zuma's account, he took R100 000 to sort out his overdrafts and placed R900 000 in a call account to accumulate interest.

The money was later used in Shaik's Nkobi group of companies.

Shaik said his relationship with Zuma was of such a nature that he could remove and deposit money into the deputy president's bank account without permission.

Mkhize remained in court until lunchtime on Monday.

He was followed by Rose Ngidi, an accountant on Shaik's Prodiba project which was responsible for the manufacture of South Africa's credit card-style driver's licences.

Ngidi testified that most of the Prodiba workers were from previously disadvantaged backgrounds when asked about Shaik's commitment to black economic empowerment.

She was followed by Fatima Paruk-Gilbert who works for Prodiba and is expected back in court on Tuesday.

With ackowledgements to Wendy Jasson da Costa and Sapa.