Get more Mail & Guardian
Subscribe or Login

A poor deputy president

A forensic report prepared for the prosecution in State v Schabir Shaik paints such a dismal picture of Deputy President Jacob Zuma’s finances that his contention that he lived off ”loans” rather than donations has to be questioned.

Late last year Zuma was cleared by Parliament’s ethics committee on charges that he had not declared ”benefits” received. The African National Congress majority on the committee accepted Zuma’s assurance that payments made to him, or on his behalf, constituted interest-bearing loans.

But the forensic report, finalised by consultants KPMG in April, undermines Zum’s explanation. It says he incurred debts when he could not afford to repay them; that R1,25-million in transfers from Shaik and the Nkobi group were not treated in the accounting records of Nkobi, Shaik or Zuma as loans; and that Shaik and the Nkobi group generally had to dig deeper into their own overdrafts to make the payments to Zuma.

The report details the R1,25-million Zuma allegedly received from Shaik and his companies after 1995, and another R1,47-million from other sources.

The report was handed to Judge Hillary Squires on Thursday. The judge has warned that all evidence should be treated with circumspection until tested by the court process.

The report says: ”It is apparent … that Zuma experienced financial difficulty from as early as January 1995 … A general pattern emerges from the analysis of the financial position of Zuma indicating that debts were incurred at times when, as is evident from the subsequent repayment history, he could not settle the debts with the means at his disposal. There were times when not even the first payment due cleared the bank.”

Here are some of the instances where Zuma, according to the report, incurred debt and had to be bailed out by benefactors:

  • Zuma in November 1994 obtained a R80 000 bond on a flat in Berea, Johannesburg. By January the next year he received a letter of demand from Permanent Bank.
  • A pattern of non-payment and letters of demand continued, but in 1999 and 2000 benefactors covered a total of R118 400 to settle the bond. The company Cay Nominees, controlled by well-connected businessman Jurgen Kogl, paid at least some of this.
  • In 1995 Standard Bank approved a R400 000 bond for Zuma to purchase an upmarket flat in Killarney, Johannesburg. By early 1997 the bond account was R30 000 in arrears. Shaik and one of his companies paid R40 000 into the bond account.
  • By 1997 Standard Bank sued Zuma for R443 000 plus interest. After negotiations and some repayments, Standard abandoned the court action. In 1999 and 2001 a total of R656 000 was paid into the bond account by Kogl and his Cay Nominees. After that, the bond remained unserviced, leaving Zuma with a debt last year of R258 336.
  • In June 1997 Standard Bank wrote to Zuma saying his current account had been conducted irregularly. In October it obtained a court judgement against him for R118 842. An agreement was reached with the bank and some repayments made, including by Shaik’s Kobifin.
  • At the time the KPMG report was completed, Zuma owed Standard Bank R128 301 on his current account, which had become inactive. But, notes the report, ”There are no indications that Standard Bank continued to pursue recovering the outstanding amount.”
  • In 1997 Zuma bought a Mercedes E320 for R305 000. The first instalment was not met. During 1999 Shaik’s Kobitech made R50 000 in payments towards financing the vehicle.
  • In 1998 Zuma financed a Mercedes E320 for R243 855. Debit orders failed from early on. The following year the car was in an accident and the insurance company refused to pay, saying the policy had been cancelled because of non-payment. Shaik picked up the repair tab of R20 520.
  • That same year Mercedes-Benz Finance summonsed Zuma for arrears. R40 000 was paid from an unknown source. In 2001 Kogl’s Cay Nominees settled the full outstanding finance amount of R183 000.
  • In May 2001 Zuma financed a Mitsubishi Pajero for R275 258. In 2002 Shaik’s Kobitech paid R47 259 towards its financing. In December last year there was an outstanding balance of R355 543, of which R129 835 was in arrears.
  • In July 2000 Zuma’s Absa current account was in overdraft by about R100 000. In October that year the account was regularised when Nelson Mandela wrote a R2-million cheque to Zuma, R100 000 of which stayed in Zuma’s account.
  • By 2001 the account was beyond its overdraft limit of R70 000 again. In September that year, a statement of Zuma’s assets and liabilities, signed by Shaik, was sent to Absa. It showed him to have a net asset position of R1,34-million.
  • The KPMG report points out, however, that the statement omitted to mention debts of R804 033 – or of R1,79-million, if transfers from Shaik and his companies for Zuma’s benefit to that date were also counted as loans to Zuma as per Zuma’s claim.
  • Between 1996 and 1999 Zuma had the use of a Durban beachfront flat rented by Shaik’s Nkobi Holdings at R3 500 a month. In his plea bargain, Shaik has claimed he regarded this as an expense for the benefit of the African National Congress.
  • In July 2000 construction was started on Zuma’s traditional homestead at Nkandla in KwaZulu-Natal, valued at R1,34-million. Leaving aside the prosecution allegation that R500 000 of French bribe money found its way towards this, a total of R190 000 came directly from other sources – R140 000 from Zuma’s friend Nora Fakude-Nkuna and her company Botshabela Wheels, and R50 000 from an unknown source.
  • In addition, a R900 000 bond on the homestead has been serviced by Durban businessman Vivien Reddy. By March this year Reddy’s contributions totalled R181 757.
  • In total, Shaik and companies in his Nkobi group are alleged to have paid about R1,25-million to Zuma or for Zuma’s benefit, including for his children’s education. Shaik has disputed some of the details, but not the fact of most of the payments.
  • If payments from other sources detailed in the KPMG report is added – from Kogl, Fakude-Nkuna, Mandela, Reddy and unknown sources – the figure rises to at least R2,7-million. If unresolved debts to financial institutions are added, Zuma’s alleged deficit, funded by others, runs to well more than R3-million.


M&G Online

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Sam Sole
Sam Sole works from South Africa. Journalist and managing partner of the amaBhungane Centre for Investigative Journalism. Digging dirt, fertilising democracy. Sam Sole has over 17731 followers on Twitter.

Related stories


If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here


Subscribers only

Fears of violence persist a year after the murder of...

The court battle to stop coal mining in rural KwaZulu-Natal has heightened the sense of danger among environmental activists

Data shows EFF has lower negative sentiment online among voters...

The EFF has a stronger online presence than the ANC and Democratic Alliance

More top stories

Kenya’s beach boys fall into sex tourism, trafficking

In the face of their families’ poverty, young men, persuaded by the prospect of wealth or education, travel to Europe with their older female sponsors only to be trafficked for sex

High court reinstates Umgeni Water board

The high court has ruled that the dissolution of the water entity’s board by Minister Lindiwe Sisulu was unfair and unprocedural

Mkhize throws the book at the Special Investigating Unit

It’s a long shot at political redemption for the former health minister and, more pressingly, a bid to avert criminal charges

press releases

Loading latest Press Releases…