Durban businessman Schabir Shaik told him that loans of R1.2 million in his company's books were in fact "development costs" and could be written off, a chartered accountant has told the Durban High Court.

Ahmed Paruk said that during a meeting he had with Shaik, the latter said he was "not happy" with his accounting department and blamed them for making the mistake.

"He said it was expenses he had incurred to land contracts *1," Paruk told the court.

Paruk is a partner at the auditing firm David Strachan & Taylor. His evidence relates to a charge of fraud against Shaik.

The State says that Shaik is responsible for the write-off of loans worth R1.2m in his company's annual financial statements for 1999.

These allegedly included money paid to Deputy President Jacob Zuma, as well as the loan accounts of Floryn Investments, a company which Shaik said was a vehicle for paying donations to the ANC, and Clegton Investments, through which payments for a flat occupied by Zuma were made.

Shaik also faces two charges of corruption relating to his relationship with Zuma.

With acknowledgement to Estelle Ellis and Cape Argus.

*1 Sure they were - bribes/donations/whatever are still expenses - but not according to GAAP.