Durban: Businessman Schabir Shaik's plan for the ANC to have a shareholding in his company was "thrown out the door" by the party when it refused to give its blessing.

This letter, written "with regret" by then-ANC treasurer-general Makhenkesi Stofile, has been handed to the high court here where Shaik has pleaded not guilty to two counts of corruption and one of fraud.

Francois van Zyl, SC, for Shaik, told the court that in 1994 his client went to Malaysia as an agent of the ANC with then-ANC treasurer, Thomas Nkobi.

Their plan was to set up structures in which the ANC would have shares as a way of reducing its overdraft of R14 million.

Cross-examining forensic auditor Johan van der Walt, who had given evidence for the state, Van Zyl told him Shaik would say he had made a large amount of money at this time and had used this to set up his company.

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

In May 1995 the ANC rejected Shaik and Nkobi's plans.

In his letter to Shaik, Stofile said: "My communication with you on behalf of the ANC should come to an end, including imminent programmes or plans. This, comrade, throws all your plans for Malaysia and elsewhere completely overboard. I regret this terrible inconvenience and personal embarrassment for me."

After this letter, Shaik wanted to continue his financial support of the ANC through Floryn Investments, a company in the Nkobi group, Van Zyl said.

Van der Walt: "I don't see the necessity ... the best way to donate money is to issue a cheque."

Van Zyl said Floryn Investments was not set up to donate money, but as a way of accounting for what was paid.

Referring to a claim Shaik had made in a letter that his firm had "purchased majority shares in arms-related industries" in SA, Van Zyl said Shaik would say he had tried to sell defence-related products to Malaysia.

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

The court is to give judgment tomorrow on the prosecution's application to lead evidence by John Lennon, of Glasgow, Scotland, by video link.

With acknowledgements to Estelle Ellis and the Cape Times.