Half of the R1-million donated to the Zulu royal household by former President Nelson Mandela was taken by fraud and corruption accused Schabir Shaik, and has yet to be repaid.

KwaZulu-Natal Finance MEC Zweli Mkhize, called as defence witness in Shaik's trial, said Development Africa has since 2001 also not taken any steps to recover the outstanding funds.

Development Africa was a trust fund which was set up to deal with welfare issues not strictly in the budget in the African National Congress, Mkhize told the Durban High Court.

He said Development Africa was established in 2000. At the time the royal household was in a poor financial state and Mandela was approached "to lend a hand".

He said Mandela then gave R2-million to Zuma. One million rand was for the Jacob Zuma RDP Education Trust Fund and the remainder for the royal household.

Royal family's money deposited in Shaik company's account

Mkhize said Zuma deposited the money for the royal household in the account of Floryn Investment.

According to Mkhize, who is the party's former treasurer-general in the province, Floryn was a dormant company belonging to Shaik and was used to receive donations for the party.

He said it was also used as "an accounting platform" for the party.

Mkhize said Shaik was unaware what the money was for and used it for other purposes.

Shaik later gave Development Africa four cheques of R250 000 each, of which only two were cashed.

Shaik had previously raised funds for household

Mkhize said the trustees of Development Africa were not "uncomfortable" with the idea that Shaik still owed R500 000 because he had previously also done fund raising for the royal household.

Shaik had been told that Development Africa would take the money when it was needed.

However, by that time, the refurbishment of the royal household had been taken over by the Department of Public Works.

Mkhize said that Development Africa had not yet given Shaik a deadline to return the money or discussed interests to be charged on the amount.

With ackowledgement to Sapa and iafrica.com.