The Durban High Court has been left to decide whether Schabir Shaik’s tax returns can be used against him in his trial for alleged fraud and corruption.
The state already has in its possession an affidavit from Rob Reid, an employee at the South African Revenue Service’s (Sars) office in Durban.
However, Peter Olsen, SC, who represents both the commissioner of Sars and Reid, told the court on Monday that Reid contravened the Income Tax Act when giving his statement.
The evidence in question relates to tax evasion and misrepresentation of financial records, the alternative to a count of fraud against Shaik and his Nkobi group of companies.
Olsen said Reid had ”unwittingly” breached Section 4 of the Act, which relates to confidentiality, and that the proper policy had not been followed in giving out information.
He said Reid came to be under ”certain impressions” that led him to divulge information to the state.
Reid was under the impression that an offence had been committed, that Sars had decided to prosecute, and that he was therefore obliged to give information to the state, said Olsen.
He said information can only be given in two exceptional circumstances — in the course of duty, or by order of a judge.
Advocate Guido Penzhorn, SC, argued for the state that the Act does not make provision for the Sars commissioner to prosecute, and if the National Directorate of Public Prosecutions knows that an offence has been committed, it does not need permission to conduct an investigation.
Shaik’s advocate, Francois van Zyl, SC, said he supports Olsen fully and that his client did not consent to the evidence as requested by the state.
Van Zyl said the decision to lodge action in the case of a tax offence lies with the commissioner.
Presiding Judge Hillary Squires said he will make a ruling as soon as possible.
Shaik’s rent was overdue
Earlier on Monday, the court heard testimony from Tracy O’Brien, who sublet a flat to Shaik in 1996.
She said Shaik told her the flat was to be used for his financial director, Colin Isaacs.
O’Brien said she wrote a letter to Shaik in June 1997 because the rent was again overdue and someone new had moved into the flat.
She said the body corporate of Mellington told her that ”some type of VIP was living in the building” because he had lots of bodyguards with guns going in and out of the building.
She later learned that the VIP was Deputy President Jacob Zuma, KwaZulu-Natal’s economic affairs and tourism minister at the time.
O’Brien said the rent was always late and ”when I got frustrated, I just got hold of Jacob Zuma”.
She said payments eventually came in the form of cheques from different companies, which she believed were subsidiaries of Nkobi Holdings.
O’Brien also told the court she decided to sell the furniture in the flat, which Shaik was interested in buying.
She said she was under the impression it was for Zuma’s house in Zululand. Although an agreement was reached that the furniture could only be removed once the money was in her bank account, the furniture was taken without her permission and she never received any money for it.
Van Zyl said Shaik had been told by the minister of intelligence that there had been several attempts on Zuma’s life, and when Isaacs moved out of the flat, Zuma — who was already living in the building — moved into that apartment.
The case continues. — Sapa