Schabir Shaik's shares in African Defence Systems (ADS), worth R21 million, were not obtained through the interventions of former deputy president Jacob Zuma.

And as such, they could not be deemed "proceeds of crime" and therefore should not be confiscated.

This was the argument of Advocate Nirmal Singh in the application before the Durban High Court by the State for a confiscation order against Shaik and his Nkobi companies to the value of R34.5m.

Yesterday, Judge Hilary Squires said he would hand down judgment at some stage, but did not indicate when. A written judgment would be handed down to inform the parties concerned accordingly.

The State claims that Shaik and his companies obtained four "benefits" through his corrupt relationship with Zuma.

One of these, it says, was the shares in arms supplier ADS which, it contends, he obtained only after Zuma intervened on his behalf, persuading arms company Thomsons to enter into a partnership with his companies.

But Singh said Shaik's payments to Zuma only started in 1998 and Zuma had attended two meetings with Thomsons that year. By then, there was already an agreement between the Thomsons group and Nkobi for the joint venture.

Singh also contended that the interventions by Zuma did not amount to contraventions of the Corruption Act because he had been acting in his capacity as deputy president of the ANC.

The second "benefit" is R12.7m Shaik received in dividends from the shares.

Singh said the dividends were used to pay off a loan used to buy the shares and to confiscate them "amounts to double-counting". He said it would ignore the fact that the dividends formed part of the value of the shares.

A third "benefit" was the R250 000 paid by Thomsons into an Nkobi account and was found by Judge Squires in Shaik's criminal trial to be part of an annual R500 000 bribe for Zuma. The money was ultimately paid to Development Africa to fund Zuma's residential development at Nkandla.

Singh conceded that while this money could be legally confiscated, Squires should use his discretion because the money was no longer in Shaik's possession.

He argued, the provisions of the Prevention of Organised Crime Act were not intended to enrich the State or further punish a person but to deprive a convicted person of ill-gotten gains.

"His company had simply been a conduit for the money to pass to Zuma. Depriving him of R250 000 would not further any legitimate State interest."

State Advocate Wim Trengove said the act allowed for confiscation of proceeds whether or not they had been retained, passed on (as the bribe had) or used to pay for shares. "It might be a relevant factor when the court exercises its discretion, but the court must be guided by the legislative policy," he said.

Squires said he would need some time to consider his judgment. He said he would not reconvene the court but would hand it down in writing.

With acknowledgement to the Cape Argus.