If the Durban High Court rules in favour of the state, Durban businessman Schabir Shaik will be stripped of assets worth R34,5 million.

The state’s application to confiscate Shaik’s assets as benefits from his “generally corrupt relationship” with axed deputy president Jacob Zuma is expected to have important implications as it is the first time that an asset forfeiture case of this magnitude has been taken to the High Court.

Asset Forfeiture Unit head Willie Hofmeyr said after yesterday’s court proceedings he is confident that the state’s argument against Shaik is according to the law and hopefully the case will demonstrate to South Africans that crime does not pay.

Earlier, Wim Trengove SC for the state argued that Shaik, who was not in court yesterday, is liable for the shares and proceeds derived from his criminal activities.

Last year Judge Hilary Squires, also presiding over the current matter, found Shaik guilty of paying Zuma over R1,2 million for his influence to secure business deals for his Nkobi group of companies.

The court also found that Shaik solicited an annual R500 000 bribe from French arms manufacturing company Thomson-CSF to Zuma in exchange for his protection against a probe into the arms deal.

Nkobi Holdings and Thomson-CSF partnered under the umbrella of African Defence Systems (ADS) to bid for the corvettes tender. Cabinet chose the German Frigate Consortium (GFC), of which ADS was part, as its preferred bidder.

The state wants to confiscate Shaik’s 20% shareholding in ADS, worth R21 million.

While the defence plans to argue that Shaik’s shares were acquired before Zuma was involved, the state claims Shaik is liable to hand over the shares as the deal was only successful through Zuma’s intervention.

The second amount the state wants confiscated is the R12,8 million in ADS dividends that Shaik and his companies received from Thomson SA.

The third benefit is the R500 000 Shaik’s Nkobi Investments received for the sale of its shares in Thomson Holdings to Thomson International. The state argues that the sale of the shares was connected to Shaik’s corrupt payments to Zuma.

The final amount is the R250 000 first instalment of the bribe to Zuma, which was disguised as a service provider agreement.

Shortly after Shaik’s conviction last year, the state froze R28,8 million of his assets. State-appointed curator Trevor White appointed Shaik’s brother Mo to take Shaik’s place as director of ADS and Thint (formerly Thomsons) pending the outcome of Shaik’s appeal.

The defence is expected to submit its heads of argument today.

With ackowledgements to Nivashni Nair and The Natal Witness.