Schabir faces bar from assets

When Durban businessman Schabir Shaik was faced with losing his empire, he responded in the way he knew best - he sent in his best people to negotiate. However, he went in person to face the sentencing proceedings yesterday after conviction on two counts of corruption and one of fraud on Thursday.

By late yesterday afternoon Shaik had agreed to the state taking control of R30 million of his assets under the country's organised crime legislation.

The agreement came after a day of negotiations between Shaik's legal team and that of the Assets Forfeiture Unit.

According to the agreement, which was made an order of court just before 4pm yesterday afternoon, Shaik had agreed to the following:

Handing over control of his indirect shareholding in African Defence Systems, which is worth R22 million
Giving the Asset Forfeiture unit control over R250 000
Identifying more than R7 million in assets that would not be confiscated but would be restrained under the country's assets forfeiture legislation.

This would mean that Shaik would be barred from dealing with these assets. The order does not mean that Shaik has agreed to the state's rights to confiscate his assets, and especially the indirect shareholding in ADS, as the proceeds of a crime. A curator will be appointed to assess and control his estate until the court has heard arguments on whether these assets should be forfeited as proceeds of crime.

It has been a devastating three days for Shaik, which ended in him being convicted of bribing his close friend Deputy President Jacob Zuma.

On the first charge of corruption, the court found that Shaik had cultivated and sustained a generally corrupt patronage with Zuma. Both he and nine of the companies that made payments to Zuma were convicted of this crime.

On the fraud charge, the court found that Shaik had caused money to be written off in the books of some of his companies and, as a result, created a false picture of the money he had paid to, among others, Zuma.

Shaik and four of his companies - Kobifin (Pty) Ltd, Pro Con Africa (Pty) Ltd, Clegton (Pty) Ltd and Floryn Investments (Pty) Ltd - were convicted of fraud.

Bribery

On the third charge of corruption, the court found that Shaik had brokered a bribe agreement between French arms company Thomson and Zuma.

According to the agreement Thomson was to pay Zuma R500 000 annually until the first payments of dividends from ADS. Two of Shaik's companies, Kobifin and Kobitech, were found guilty of money-laundering after the court ruled that they were party to a service provider agreement used to hide the payment of the bribe money.

The shares in ADS came the way of Shaik's Nkobi group of companies after Zuma, according to trial judge Hilary Squires, intervened on Shaik's behalf in a dispute with French arms company Thomson.

His intervention was one of the instances in which, the court said, Zuma acted as a result of the corrupt patronage between the two men.

It is also believed that the forfeiture unit wished to confiscate R250 000, which the judge found, was paid by Thomson as part of a bribe deal with Zuma, brokered by Shaik.

In courtroom A of the Durban High Court, things were back to normal yesterday. There were no more cameras and no curious members of the public.

Shaik seemed calm - seemingly deep in thought, twisting a ring around his forefinger.

Prosecutor Billy Downer SC called a researcher from the Institute for Security Studies, Hennie van Vuuren, to testify in aggravation of sentence.

Minimum sentence legislation dictates that Shaik qualifies for three minimum sentences of 15 years each for the crimes of which he has been convicted.

Van Vuuren said corruption was "one of the biggest developmental challenges facing the world today".

He explained that the World Bank said bribes in excess of $1 trillion (R6 500 billion) were paid annually worldwide, and the African Union believed the extent of bribery to be $148 billion (R962 billion) in Africa alone.

Van Vuuren said bribes of between R50 billion and R150 billion were paid annually in SA's private sector alone.

"It is the poor who are too often the ultimate victims of corrupt activity by members of the business and political elite," Van Vuuren said. He added that South Africa had much to learn from the way in which Lesotho had treated corruption.

"In recent years it has successfully prosecuted some of the world's leading construction companies, who have been found guilty of paying bribes to secure tenders *1 in the multi-billion rand Lesotho Highlands Water Scheme."

Van Vuuren also said that an ISS victims-of-crime survey showed that corruption was the crime experienced the second most often after housebreaking - yet 98% of those involved said they would not report it, as it would not change anything.

The trial continues.

With ackowledgements to Estelle Ellis and the Saturday Independent.

*1 And the SA National Director of Public Prosecutions withdrew charges against the main culprit in this case, Thomson-CSF - it's a scandal in itself.

What about the other main role-player whom Squires J directly implicated in his judgment as intervening along with Zuma to unlawfully secure a contract for ADS and Thomson-CSF, i.e. the Chief of Acquisitions of the Department of Defence?