Publication: Independent Online Issued: Date: 2007-11-23 Reporter: Tania Broughton

Shaik Needs Millions for New Court Battle

 

Publication 

Independent Online
Date

2007-11-23
Reporter Tania Broughton

Web Link

www.iol.co.za

 

Schabir Shaik says it is going to cost him R2,5-million to fight his Constitutional Court appeal against the state's attempt to confiscate the R33-million it says he scored through his corrupt relationship with Jacob Zuma.

However, the imprisoned former businessman - who is in hospital after suffering a stroke - says while he and his companies have substantial assets and working capital *1, they have little cash.

And unless the state releases some of the millions it is holding under curatorship, his final court battle will be severely prejudiced.

Through his lawyer, Reeves Parsee, Shaik has now made an urgent Durban High Court application for the money to be released.

The Asset Forfeiture Unit is set to oppose the application. In documents filed with the court, the unit and the court-appointed curator, Trevor White of PricewaterhouseCoopers, say this is the second time Shaik has asked for money: on the first occasion in 2006 he agreed it would be the last.

The unit has also asked that Shaik and his two affected companies, Nkobi Holdings and Nkobi Investments, prove that they cannot pay the legal fees.

The unit's MK Molelle argued that the R2,5-million estimate seemed "grossly unreasonable" and that the court case - set down for February - was more likely to cost R500 000.

The dispute has its roots in the Durban High Court decision of Judge Hilary Squires, who found Shaik guilty of corruption and fraud relating to his relationship with Zuma, and ordered the confiscation of more than R34-million worth of his assets, deemed to be his ill-gotten gains.

The amount was reduced slightly on appeal to the Supreme Court of Appeal. Earlier this year, in squashing his applications for leave to appeal against his conviction and 15-year prison sentence, the Constitutional Court gave Shaik the go-ahead on the asset forfeiture issue.

In the interim, various agreements have been in place between Shaik and White regarding the preservation of assets pending finality on the matter.

Most recently, Shaik sold the arms deal shares for R41 million which got him into trouble and White released all other assets in return for this cash.

In the application, Parsee has deposed to an affidavit because, he says, Shaik is indisposed in hospital.

He says the interest earned on the restrained money - R8-million - remains an issue of dispute.

Shaik believes the state is not entitled to it and it will probably be the subject of another court battle.

"We contend that the curator is presently holding over and above the confiscation amount and it is not lawfully held and falls to be returned... We are deprived of access to these funds to prosecute the appeal in the meantime," he said.

According to papers attached to the application, the "active" companies in the Nkobi group are valued at about R130-million *2.

Shaik's personal balance sheet reflects assets of R98-million *3, mainly through his shareholdings in his companies.

Parsee conceded that while Shaik and the companies owned substantial assets, they were mostly encumbered or committed in terms of contracts and business operations and could not be immediately converted into cash.

However, he said, should the R2,5-million be released, Shaik would hand over his 250 Cellsaf shares - valued at about R10-million - in return *4.

The hearing has been set down for Wednesday.

* This article was originally published on page 1 of The Mercury on November 23, 2007

With acknowledgements to Karyn Maughan and Independent Online.
 


*1       Much of what Shaik and his Nkobi Holdings has been acquired through unlawful means and not only through the Arms Deal.

The N3 Toll Road Concession and Credit Card Drivers Licence contract wee acquired under the bumiputeian top cover of then Minister of Transport, Mac Maharaj.

Mac Maharaj has been under investigation for years and charges should have been preferred, but this case is one under review since the suspension of Adv Vusi Pikoli.

Mac Maharaj is an ANC party heavyweight with his own constituency "earned" from the struggle in general and Operation Vula in particular.

There seems to be a clear indication that his tail should not be too vigourously tugged at present, if at all.

In any case if it is true that Shaik and his companies have substantial assets and working capital, then they can easily obtain cash by borrowing money from the bank or selling some of these substantial assets.

In any case what is "working capital" if it is not easily convertible into cash and surely savings one's assets from forfeiture is deserving of the application of working capital.


*2      Case in point.


*2*3    For someone who could not rub two brass farthings together a decade ago (but had a good couple of good numbers in his cellphone), he has done very well (financially) indeed thank you.

Having invented nothing, indeed producing nothing of value on its own accord, Nkobi Holdings has benefited hugely fro its bumiputerian foundations.


*4      Now this is a deal. How could any bank turn this one down?

Something seems fishy in the State of Nkobi.