Publication	Independent Online
Date	2006-08-04
Reporter	Tania Broughton
Web Link	www.iol.co.za

Schabir Shaik, the Durban businessman convicted of having a corrupt relationship with sacked deputy president Jacob Zuma, is running out of money, it seems.

With just two weeks to go until his appeal against his corruption and fraud convictions and 15-year prison sentence begins in Bloemfontein's Supreme Court of Appeals, the once-wealthy businessman does not have the cash *1 to pay his lawyers, according to documents filed with the Durban High Court.

Shaik and three of his Nkobi companies were stripped of R34,4-million in assets by Durban High Court Judge Hilary Squires earlier this year after he deemed them to be the proceeds or benefits of his corrupt relationship with Zuma.

The assets included his R21-million stake in African Defence Systems (secured through his shareholding in French arms company Thint) *2, R12,7-million he had earned in dividends from these shares and R500 000 paid to a Nkobi company as part of its acquisition of the shares.

He had also promised to make up any difference

At the time of the forfeiture order, court-appointed curator Trevor White already had control of about R28-million of Shaik's assets which he retained pending the outcome of the Supreme Court of Appeals deliberations.

It was suggested then that if the assets were finally confiscated and Shaik and his companies had to pay the R4-million in fines imposed on them as part of the sentence, the once multi-millionaire was facing financial ruin, a claim hotly denied by Shaik and his family.

But in the past month Shaik, through his lawyer Reeves Parsee, has been negotiating with White to release more than R2-million in cash to him so that he can pay his legal fees, offering his Innes Road, Morningside, mansion as collateral.

According to a report filed with the court, Shaik had made "a number of approaches" to White and the Asset Forfeiture Unit for the release of funds for legal expenses.

"I informed them that this would only be possible if further assets were placed under restraint," said White in his report.

'Mr Shaik is occupying certain areas of the main residence'

"An undertaking was given on June 28 by Parsee that they would consent to the property at 343 Innes Road, Morningside, Durban being included as part of the restrained property under my control," White said.

It has been agreed that Shaik would continue making the bond repayments and paying the rates and this would be the last time he would be given any money for legal fees or living expenses.

White said Shaik had also agreed that if the confiscation order were finally granted the property could be sold. He had also promised to make up any difference between the confiscation amount ordered by Squires and what was eventually realised from the restrained assets.

In another report filed with the court, property appraiser John Wyles described the property as a double-storey "majestic residence" worth between R6 - R6.85-million.

It was in one of the most sought-after residential areas, had spectacular views and a "state-of-the-art" koi pond. "The property is, for the most part, unoccupied; however, Mr Shaik is occupying certain areas of the main residence," said Wyles.

According to White's report, however, there is an outstanding bond balance of R5,2-million on the property. "The equity in this property is thus less than the R2 065 200 released for legal expenses.

"Parsee gave a further undertaking on behalf of Shaik that they would not alienate, encumber or dispose of any of their unrestrained property without my express written permission."

White reported that he now had under his control assets valued at about R30,5-million. This was made up of the Thint shares (R21-million), cash (R1,4-million), Cellsaf shares (R7,25-million) and the equity in the Innes Road property (R847 500).

Shaik's appeal against his corruption and fraud convictions has been set down for August 21.

This appeal has been cited as one the reasons why the State cannot proceed with Zuma and Thint's corruption trial.

An application for an adjournment in that trial is to be heard on September 5 in the Pietermaritzburg High Court.

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*1       Shaikh's Nkobi Holdings still makes a few million Rands per year out of its very lucrative credit card-type drivers licence deal that it won under the top cover of one of his other great heroes and beneficiaries, Mac Maharaj.


*2      Riddle

1.      What's going to happen to Nkobi Holdings's 20% equity in ADS once the SCA upholds the assets forfeiture ruling?

2.      What's going to happen to Thint's 60% equity in ADS once there is a similar asset forfeiture?

3.      Will Armscor invoke the Remedy in Case of Bribes clause of the corvette contract if Shaikh (an ADS director and indirect ADS shareholder) and/or Thint (a direct ADS shareholder with half a dozen ADS directors)?