Justin Arenstein
A key player in South Africa’s controversial arms deal, Shabir Shaik, helped sort out a financial crisis experienced by Deputy President Jacob Zuma in 1998.
Shaik was Zuma’s financial adviser while he was finance MEC in KwaZulu-Natal.
Bank records indicate that Shaik tried to help Zuma convince the troubled New Republic Bank (NRB) to take over the deputy president’s R443?000 home loan from Standard Bank after it fell into arrears two years ago. Zuma told the Mail & Guardian at the time that he transferred the loan to NRB after he failed to keep up with payments on his house in Killarney, Johannesburg.
Standard Bank declined to foreclose on Zuma, but obtained a court judgement against the deputy president in October 1997 after he apparently failed to repay a R120 000 overdraft on the bond. It also simultaneously obtained a judgement against Michigan Investments cc for arrears on the bond. Zuma told Parliament’s Register of Member’s Interests in 1999 that he was the sole member of Michigan Investments cc, and listed the Killarney house and a property in Berea as assets. Both the Registrar of Companies and Closed Corporations, and the Deeds Office, list a foreign national, Walter Alexander Warden, as Michigan’s sole member.
Zuma has failed to answer repeated questions on the issue over the past four weeks.
The NRB, which has ceased trading and is in receivership, said on Thursday it had no record of ever approving an account in Zuma’s name. The NRB confirmed, however, that both Zuma and Michigan were listed on the bank’s electronic archives as applying for financing. Shaik is listed as both Zuma and Michigan’s only contact. Shaik is understood to have convinced Standard Bank to retain the loan, but no detail was available on how the outstanding amount was settled. Shaik is the brother of South Africa’s defence secretariat’s chief of acquisition, Chippy Shaik, and a director of African Defence Systems, which was appointed by the defence secretariat to coordinate the acquisition of the corvettes and to integrate the ships’ equipment. Zuma’s representative, Lakela Kaunda, would only confirm that Shaik was the deputy president’s financial adviser and refused to answer 15 written questions sent to Zuma’s office on Tuesday. These included three questions about how the Standard Bank loan was settled. “[The] allegations are untrue. We have given our side of the story and we will not participate in an African Eye News Service witchhunt,” she finally said on Thursday in a cellular phone SMS. Among the questions Kaunda refused to answer were queries about his relationship with another contentious company, Corridor Management Corporation. It was the only company invited on a world tour to meet the Dolphin Group and secure lucrative contracts with them. The Dolphin Group was at the centre of the scandal which saw Mpumalanga illegally sign away development rights on all its game parks for 50 years. Zuma was the key speaker at the Corridor Management Corporation’s glitzy launch ceremony at Royal hotel in Pilgrim’s Rest in 1996. He was flown to the event by Air Excellence at taxpayer expense. The M&G previously exposed Air Excellence as a front company secretly owned by local politicians. The M&G reportage sparked a special auditor general probe which slated the provincial administration and Mpumalanga Parks Board for repeatedly using Air Excellence when cheaper alternatives existed. African Eye News Service