Oops: donation to Zuma showed up in accused's companies

Durban businessman Schabir Shaik has admitted to having inadvertently transferred a donation from former president Nelson Mandela to Deputy President Jacob Zuma to his own companies.

Shaik however testified that when he realised that the money was meant for the upgrade of a Zulu royal residence, he tried his best to pay it back as quickly as possible.

It came down to the wire for Shaik this week as he took the stand to give evidence in his own defence.

Shaik has pleaded not guilty to charges of fraud and corruption. After the state closed its case two weeks ago, Shaik indicated on Monday that he wished to tell his side of the story to the court.

A tired but determined Shaik pushed on yesterday to complete his fifth day in the witness stand. It is expected that the leader of the prosecution, Billy Downer, SC, will get his chance to cross-examine early next week.

It has been a week of upheaval and steely determination in the Shaik camp. At the beginning of the week all was not well in the camp with Shaik and his senior counsel, Francois van Zyl, involved in irritated exchanges.

By Wednesday Shaik had recovered much of his composure and even smiled occasionally, although it was clear the strain of being in the witness stand was taking its toll. From time to time Shaik asked for a chance to catch his breath, and wiped his face with a moist towel.

Yesterday's evidence focused on the correspondence the state said was triggered by French arms company Thomson's reluctance to pay a bribe to Zuma.

It is the state's case that Shaik solicited a bribe from Thomson for Zuma. According to an encrypted fax, apparently the only direct documentary evidence of such an agreement, Zuma would lend his protection and support to Thomson in exchange for two annual payments of R500 000 each and the payment of dividends from African Defence Systems later.

Shaik however said that the letters handed to the court by the state had nothing to do with a bribe. In fact, earlier in the week, sounding baffled, he explained how it was beyond both him and Zuma that a meeting they had had with French businessman Alain Thetard could have translated into the fax he wrote.

"Zuma and I had from time to time attempted to fathom what had possessed Thetard to write this," Shaik told the court.

His indignation at how the state had interpreted his correspondence escalated with his evidence that he was really referring to a donation that Thomson had promised the Jacob Zuma Education Trust.

He said he had asked Thetard as long ago as 1998 to consider donating money to this trust. He repeated the request in September 1999. He had not considered it polite to ask for a specific amount, but would have proposed a donation of R5 million or R10m *1 - *5 if somebody had asked. "I knew Thomson's financial capabilities *6," he said.

Shaik told the court that he even took Thetard to meet Zuma. It was after this meeting that Thetard wrote the fax.

Shaik emphasised that he was always positive that Thomson would make the donation. "I emphasised to them that they must be seen to help with South Africa's development goals, especially education."

The "opaque" language he had used to refer to the donation, was just his style of writing, he said.

Yesterday the court was referred to letters saying that Shaik "had no choice but to seek and an alternative remedy *7".

He said he had meant that he would either have to make a donation from his "own limited resources" or tell Zuma to look elsewhere for funding.

Further correspondence referred to "his client" feeling "let down", and to an "extremely delicate matter".

Shaik explained to the court that the French company's refusal to make the donation had caused embarrassment and conflict between himself and Zuma. "The donation did not materialise," he said.

He was also asked about a service provider agreement, which the state says was used to facilitate the payment of the bribe. The state claims one payment of R250 000 had been made.

Shaik said that he had concluded the service provider agreement with Thomson because he found himself in difficulty after inadvertently transferring funds from Zuma's account that was meant for Development Africa.

The money was paid to Zuma by former president Nelson Mandela. Half of it was meant for the Jacob Zuma Education Trust and the rest for Development Africa, for upgrading a Zulu royal residence.

Shaik said that by rendering services to Thomson for payment he wanted to generate funds to pay back the money to Development Africa.

The service provider agreement was for R1m. The state says it was no coincidence that this was the same amount mentioned in the bribe agreement.

The trial continues.

With acknowledgements to Estelle Ellis and Cape Argus.

*1 How much did the Nelson Mandela Trust get?

*2 How much did the Thabo Mbeki Trust get?

*3 How much did the Hadiba Trust get?

*4 How much did Yusuf Surtee get?

*5 How much did Barbara Masekela get?

*6 Either 5% of R2,6 billion (the 1998 price of the Corvette Combat Suite) or 5% of R1,3 billion (the 1998 value of Thomson-CSF's and ADS's workshare in the Corvette Combat Suite) was set aside by Thales for "Commissions".

*7 The term "remedy" is appropriate when a wrong has been perpetrated. Even changing on'e mind about making a donation is not a wrong.

It would be appropriate just to use the term "alternative".

In any case, when handing education bursaries to the disadvantaged, whether to the bumiputera (sons of the earth) or one's very own three quarters of a dozen children, the trustees are always seeking more funds - seldom alternative funds.