Durban businessman Schabir Shaik will only later find out if he has to turn over R34-million to the state after the Supreme Court of Appeal (SCA) in Bloemfontein reserved judgement on his civil appeal on Wednesday.
The state says the R34-million is proceeds from the benefits Shaik and his Nkobi group reaped from their relationship with former deputy president Jacob Zuma.
Shaik’s legal team did not argue that the confiscation order be thrown out — as set out in their heads of argument — but alternatively that Shaik should only have to pay R21-million for shares held in arms company African Defence Systems (ADS). Shaik got hold of these shares through his association with Zuma.
The appellants argued that R12,7-million worth of ADS dividends were used to pay off a loan with which the shares were initially bought. Shaik should not have to pay both the value of the dividends and that of the shares.
Francois van Zyl SC said the dividends were not the ”fruits of crime” that must be forfeited according to the Prevention of Corruption Act (POCA). He said it was ”disproportionate in the extreme” to have both the dividends and the shares declared forfeit.
State prosecutor Wim Trengove did not agree with the appellant that profits should become the benchmark of forfeiture.
He said the Act referred to the gross proceeds of a crime, the ”fruits of the poisoned tree” and not merely the profit of a crime.
”It doesn’t matter what happened to the proceeds, it doesn’t matter whether they were used for wine, women and song, or a strong investment … it doesn’t matter,” said Trengove.
Another of the benefits in question is the R500 000 Nkobi Investments received when it sold its shares in Thint Holdings to Thales. Van Zyl argued that this R500 000 was based on a legitimate investment.
Trengove said it was part of the same transaction — involving Zuma’s influence — which got Nkobi the shares in ADS and that gave them the shares in Thint Holdings.
”It was a transaction that was as much a product of crime as the acquisition of the shares,” he said.
He said the benefits were achieved not only by Zuma’s interventions with the French on behalf on Nkobi, but in the way Shaik used Zuma as a selling point.
”An example of this is the way in which Shaik consistently waved the Zuma carrot,” said Trengove, referring to the way Shaik used Zuma to encourage the French to take on Nkobi as a partner in the arms contract with ADS.
He said forfeiture sought not only to achieve punishment, but also the greater public interest of deterring others from such crimes and removing the assets from society.
Shaik’s assets, currently in the custody of a curator, would be returned to him if his bid to have the state’s ruling overturned is successful. An additional 15,5% interest — which could amount to an additional R5-million — could be added to the R34-million if the appeal does not succeed.
This civil appeal follows Shaik’s criminal appeal against his fraud and corruption convictions. The SCA reserved judgement on Tuesday in this appeal after two days of argument.
The appeals arose from a seven-month trial last year in which Shaik and several of his companies were found guilty on two charges of corruption and one of fraud. Shaik was sentenced to 15 years in jail, in effect, and his companies were sentenced to pay fines of more than R4-million. The state then ordered that a further R34-million assets be forfeited.
The asset forfeiture order would fall away should the SCA not uphold Shaik’s convictions.
More than 12 000 pages of trial records form part of the criminal appeal, with an additional 600 related to the civil appeal. Shaik was not present at the appeal hearings, choosing to avoid the media frenzy in favour of spending time with his family in Durban.
All that remains is for the five Supreme Court judges to decide on the matter and write up their judgement. It is not known how long this could take. — Sapa