Regret letter lodged in court

Durban businessman Schabir Shaik's plans to have ANC shareholding in his company was "thrown out the door" by the party when it refused to give them its blessing.

A letter, written "with regret" by ANC Treasurer-General Makhenkesi Stofile, was handed to the Durban High Court during Shaik's trial yesterday.

Shaik has been charged with two counts of corruption and one of fraud, to which he has pleaded not guilty. The corruption charges relate to the relationship between Shaik and Deputy President Jacob Zuma.

The state's forensic auditor, Johan van der Walt, took the stand for his marathon cross-examination to continue.

Shaik's senior counsel, Francois van Zyl SC, yesterday told the court that in 1994 Shaik went to Malaysia as an agent of the ANC. The plan he and former ANC treasurer Thomas Nkobi had was to set up structures in which the ANC would have shares as a way to reduce the ANC's overdraft of R14 million at the time.

Van Zyl said Shaik would say that he had made a significant amount of money at this time, which he used to set up his firm.

"I find it strange that Shaik made money for himself," Van der Walt said. "At the time Shaik was an agent for the ANC."

In May 1995 the ANC rejected Shaik's and Nkobi's plans. A letter written by Stofile stated: "The initiative of the late comrade TT Nkobi would not be pursued or authorised. My communication with you on behalf of the ANC should come to an end, including imminent programmes or plans."

Van Zyl said that after this letter Shaik wanted to continue his financial support of the ANC through Floryn Investments - one of the companies in the Nkobi group and one of the corporate accused before court.

Shareholder

Van Zyl said that Floryn Investments was not set up with the purpose of donating money, but was used as a way to account for what was paid.

Van Zyl also said that Shaik would testify that Zuma was not and had not been a shareholder of the Nkobi group of companies.

The last stand-off of the day was over Shaik's written claim, in a letter, that his company "had purchased majority shares in arms-related industries in South Africa".

"Mr Shaik will say that he tried to sell defence-related products to Malaysia," Van Zyl said.

"It does not explain my point," Van der Walt said. "He said in his letter he purchased majority shares."

Van der Walt's cross-examination continues.

• Judgment in an application by the state to lead the evidence of Prof John Lennon, of Glasgow, Scotland, by satellite link is expected tomorrow. The application is opposed by Shaik's legal team on legal grounds.

With acknowledgements to Estelle Ellis and The Mercury.