Publication: Business Day Issued: Date: 2006-11-07 Reporter: Ernest Mabuza Reporter:

Bad News for Shaik — An Ominous Twist for Zuma

 

Publication 

Business Day
Date 2006-11-07

Reporter

 Ernest Mabuza

Web Link

www.businessday.co.za

 

The Supreme Court of Appeal yesterday crushed any hope Durban businessman Schabir Shaik might have had of avoiding jail time when it dismissed his appeal against conviction and sentence on two counts of corruption and one of fraud.

The court also unanimously dismissed Shaik and two of his companies’ appeal against the Durban High Court order that they forfeit assets worth about R34m seen as proceeds of crime. The only consolation is that Shaik will get back R500 000, the profit earned from the sale of several Thomson-CSF shares to Thales.

The court also agreed with the 15-year sentence imposed by Judge Hilary Squires on Shaik.

“The seriousness of the offence of corruption cannot be overemphasised. It offends against the rule of law and the principles of good governance. It lowers the moral tone of the nation and negatively affects development and the promotion of human rights,” the court said.

The judgment considered the first count of corruption — in which it was found that there was a generally corrupt relationship between Shaik and former deputy president Jacob Zuma — in detail.

The charge said Shaik and some of his companies made 238 separate payments either directly to or for the benefit of Zuma. These payments were to influence Zuma to use his name and political influence for the benefit of Shaik’s enterprises.

“An early indicator that Shaik wanted to make commercial capital out of knowing Zuma and out of the latter’s political position, was the fact that Shaik initially earmarked him for Nkobi shareholding. In the end that did not materialise *1 because it was (African National Congress) policy that neither the governing party nor its ministers would become involved in government-backed commercial enterprises.”

The court said the main basis for Shaik’s defence was that the payments were loans and comprised two written acknowledgements of debt prepared in about 1998 and signed by Zuma in favour of Shaik. The court said there was never a genuine intention to reflect any specific amount as actually owed by Zuma to Shaik.

“That … compels the question whether there was a genuine indebtedness at all. A professed debt in no definable amount is in reality no debt.”

The court said the documents would have been drawn up with some objective in mind. It said the question was whether they were intended for disclosure in terms of contemplated future legislation or perhaps simply to have on hand if the payments to Zuma became publicly known and questions were asked.

The appeal court agreed with Squires that the acknowledgment of debt forms were not genuine.

“On a conspectus of all the evidence there is, in our view, only one reasonable inference to be drawn. It is that, in making payments in issue, Shaik intended to influence Zuma, in furtherance of the business interests of Shaik and his companies, to act in conflict with the duties imposed upon Zuma by the … constitution.”

On the fraud count, in which Shaik was found to have irregularly written off about R1,2m in his Nkobi group’s financial statements, the court said the write-off served to avoid a qualified audit report. The court said the auditors, unprompted, would not have had reason to contrive the write-off themselves.

The court also upheld the admissibility of the “encrypted fax”, written by French arms company Thomson director Alain Thetard.

In the fax, Thetard said Shaik had requested Thomson-CSF to pay R500 000 a year and that the payment would be in protection of Thomson-CSF during the arms deal investigations.

Shaik objected to the admissibility of the fax and said he did not get a chance to cross-examine Thetard, who had refused to testify in SA.

“In our view it is highly unlikely that the evidence of Thetard or his presence as a co-accused would have strengthened the appellants’ case.”

The court said substantial corroboration for the evidence contained in the fax was to be found in the other evidence adduced by the state and in Shaik’s own defence. The appeal court said it was common cause that Shaik and Thetard met in Durban in September 1999.

Shortly before the meeting, a motion by then Pan Africanist Congress MP Patricia de Lille had been tabled in Parliament calling for the establishment of a full judicial commission of inquiry into the arms acquisition and offset process and to determine whether certain officials and public representatives were guilty of criminal conduct in their dealings regarding the arms procurement process *2.

The appeal court said it was common cause that Shaik, on September 30 1999, and on March 10 or 11 2000, requested that an amount be paid by Thomson. The court said the state had proved that Thomson-CSF corruptly offered to give a benefit which was not legally due to Zuma — who had been charged with public duties — with the intention to influence him to commit or to do an act in relation to that duty. The constitution states that members of the cabinet may not undertake any other paid work or act in any way that is inconsistent with their office.

However, the appeal court said a section in the Corruption Act of 1992 did not expressly require communication of the offer to the person who was sought to be influenced and there was no requirement to read that requirement into the section.

The court said it was therefore unnecessary to decide whether Zuma was aware of the offer.

With acknowledgements to Ernest Mabuza and Business Day.


*1       Maybe not officially, but who is are the real beneficiaries of the equity of Clanwest Investments (Pty) Ltd?

Why does Schabir Shaik need to own equity in Nkobi Holdings via multiple holding vehicles such as Starcorp (Pty) Ltd, Clanwest Investments (Pty) Ltd and Floryn Investments (Pty) Ltd.

It is known that the latter is the special purpose vehicle (SPV) for the ANC's interest in Nkobi Holdings. Clanwest Investments (Pty) Ltd is clearly an SPV for something else.

Why was the R500 000 per annum bounded by the rider "until ADS starts paying dividends".

The reason is because Jacob Zuma and the ANC are effectively occult shareholders of Nkobi Holdings.


*2      So far only two person have been found guilty of criminal conduct in their dealings regarding the arms procurement process and only one was a public representative who had limited involvement.

What about the others?

What about the man who was in charge of the acquisition process, but had a declared conflict of interest as the brother of the very latest arms deal criminal and whose recusal was officially found to be "no recusal at all"?

What about the main man who had guaranteed the corrupt French the contract over two years before it was concluded?