Despite blaming his auditors for the illegal write-off of R1,2-million from his company’s books, fraud and corruption accused Schabir Shaik still employs them.
He told the Durban High Court on Wednesday he will meet with his shareholders after the trial to discuss his auditors’ contract.
Shaik has blamed the David Strachan and Taylor auditors for the development costs write-off, which also extinguished loan accounts in the names of Shaik, Floryn and Clegton.
The state alleges the R1,2-million was paid to Deputy President Jacob Zuma and in exchange Shaik used Zuma’s political influence to further his business interests.
Shaik said he first became aware of a possible ”problem” in his books when he received a resignation letter from his former accountant Celia Bester, who said in the letter she was unable to put through the development costs in her journal.
Shaik then called a meeting with his auditors, set the agenda and then left them to discuss the issue.
”You don’t know what happened at the meeting. For all we know, they could have had a game of poker,” said Judge Hillary Squires.
Shaik said he paid the auditors a handsome sum to rely on their expertise.
”When you signed the 1999 financials, what did you think became of the loan account?” asked prosecutor Billy Downer.
”I did not apply my mind to the loan account at that time,” said Shaik.
He said he had no basis to query the financials and that he merely had to sign it.
Shaik would not have permitted write-off
On Tuesday, Shaik said if he had known it was incorrect, he would not have permitted the write-off of R1,2-million as development costs in the 1999 annual financial statements of his Nkobi Holdings.
”I would not have put my company at risk by that action,” said Shaik, explaining that the underlying investments in his company ”runs into several millions”.
Under the relentless cross-examination of Downer, Shaik said that when he realised that ”a fundamental error” had occurred in his books, he approached senior counsel Nirmal Singh, who had advised him that a reversal was in order.
”If you found anything wrong, were you in the position to rectify it?” asked Downer.
”Absolutely, absolutely,” said Shaik. He also conceded that Bester was right when she pointed out that the write-off was incorrect.
Downer asked him if he knew that his loan account would have been ”extinguished” by the write-off and if not, whether he was he able to pay the loans to his company out of his own pocket.
Shaik said he would not have been able to pay back the money immediately and that he chose to wait for dividends to be paid to him before settling the debt.
Why Zuma had stepped in
Downer asked Shaik why Zuma had stepped in to help Shaik when he had problems with French arms manufacturer Thomson CSF, and with Deva Poonoosamy when Shaik wanted to be appointed the black empowerment partner in a tourism school in KwaZulu-Natal.
Shaik said one of the reasons Zuma had helped him was because Thomson CSF had problems in understanding black economic empowerment (BEE).
”I don’t believe there is any exclusivity between Zuma and me,” said Shaik.
He said Zuma had a duty to any empowerment company. He added BEE should benefit all black people in South Africa, as well as disadvantaged whites.
Shaik admitted that he overstated the length of his relationship with Zuma in correspondence.
Some of his documents indicate that he and Zuma have been working together for more than 25 years.
However, in his plea explanation and evidence in chief, Shaik told the court that he and Zuma had only met in the 1980s.
Asked why the documents indicated otherwise, Shaik said that his brothers and father had known Zuma longer than he had and conceded that the dates were wrong.
When asked if he had paid back an outstanding R400 000 from R900 000 he had taken from Zuma’s account, which was supposed to go to Development Africa, Shaik said he had paid the money in cheques to Zweli Mkhize, who was trustee of the organisation at the time.
”I believe Zweli Mkhize is happy to testify to that effect,” said Shaik.
Mkhize is currently the provincial minister for economic affairs in KwaZulu-Natal.
The trial continues. — Sapa