Why was Deputy President Jacob Zuma present at meetings between Schabir Shaik and French arms manufacturer Thomson-CSF?

Defence advocate Francois van Zyl on Tuesday told the Durban High Court that Zuma's involvement was limited to resolving a dispute regarding allegations that President Thabo Mbeki had said that Shaik's Nkobi Holdings was not a suitable and acceptable Black Economic Empowerment company in South Africa.

Van Zyl explained this during cross-examination of one of the state's key witness, KPMG's forensic director Johan van der Walt who compiled a 250-page report on Shaik's business affairs which the state hopes will prove that Shaik solicited an annual R500 000 bribe to Zuma for protection from investigations into the country's controversial multi-billion rand arms deal.

Nkobi Holdings and Thomson-CSF partnered under the umbrella of African Defence Systems (ADS) to win the corvettes tender. On November 18 1998, Cabinet chose German Frigate Consortium (GFC) as its preferred bidder. ADS was part of this consortium. Nkobi Holdings and Thomson-CSF shared the winnings through ADS.

The state also claims that Shaik paid Zuma for his political influence to get projects for Nkobi Holdings.

Van Zyl on Tuesday told the court that before the bidding process, while ADS shareholding was discussed, Shaik had a discussion with Zuma with regard to the allegations which were attributed to Mbeki.

"Shaik will say that these allegations were that he and his company were not seen as acceptable and suitable BEE partners," Van Zyl said.

He said Zuma met Thomson-CSF's Jean Paul Perrier in London when he was on official business and again on November 18 1998 at the Elangeni Hotel in Durban.

According to Van Zyl, Thomson International sent a letter to Shaik on July 7 1998 requesting a meeting with Zuma while they were in South Africa from November 17 to 19.

"Shaik will say that Zuma did arrive during the meeting on November 18 1998 but was not there for the whole meeting. Zuma arrived when the meeting was in progress. He spoke to Pierre and others at the meeting and left long before it concluded," Van Zyl explained.

Zuma's attendance, according to the defence, was merely to resolve issues surrounding BEE partners in ADS. A dispute erupted when FBS, another black economic empowerment party, joined ADS.

"The manner in which Thomson-CSF acquired the shareholding in ADS initially resulted in the position in which the Nkobi group was excluded from any direct or indirect interests in ADS. These events culminated in a situation whereby, during 1998, Shaik was ostensibly upset. At that point in time, FBS acquired a direct interest of 20% in ADS," Van der Walt explained during his chief evidence two weeks ago.

He said documents indicate that Mbeki and former president Nelson Mandela assisted and advised on the eventual structuring of the shareholding of ADS.

"Indications are that at least Mandela and Mbeki were involved in negotiations and discussions during the period leading up to the day when Cabinet approved the list for the supply in the arms deal. However, it appears that their involvement was limited to attempts in resolving disputes regarding the black empowerment partner component reflected in the shareholding structure of Thomson-CSF and ADS," Van der Walt claimed.

Van Zyl on Tuesday told the court that Zuma's involvement in negotiations was nothing more than Mandela or Mbeki's involvement.

Van der Walt rejected this. He said he found it strange that Zuma was "extremely concerned" about Nkobi Holdings' position in ADS. Furthermore, he explained that there were several documents which proved that Zuma was involved in the informal bidding process for the arms deal.

When asked what was the connection between the final share meeting which Zuma attended on November 18, 1998 and Cabinet's announcement of the preferred suppliers of the corvettes on the same day, Van der Walt said it was important that the distribution of ADS shares took place before the the announcement although the meeting did not have bearing on Cabinet's decision.

"It was critical that the shareholding had to be confirmed before the announcement," he said.

Van der Walt said it could have also been coincidental and that Perrier could have been in the country to attend DEXA, which was an exhibition on the arms deal.

After Van Zyl told Van der Walt that his client was not aware of several documents which the state has produced as evidence of correspondence between Mandela's tailor, who allegedly was assisting to secure political influence for Thomson-CSF, and notes from Thomson-CSF's Alain Thetard documenting discussions on the informal bidding process, Judge Hillary Squires asked Prosecutor Billy Downer what was the purpose of submitting documents which Shaik had nothing to do with.

Downer replied that it was to show that Thomson-CSF was susceptible to use informal processes to win the arms deal tender and it was a background to show that they were in "cahoots" with Shaik.

With acknowledgements to Nivashni Nair and The Natal Witness.