/ 22 January 2009

NPA to respond on ‘secret’ Shaik deal

The National Prosecution Authority (NPA) will respond late on Thursday afternoon to media reports that it has made a ”secret deal” with fraud convict Schabir Shaik.

NPA spokesperson Tlali Tlali said a statement would be released in the afternoon. He declined to give any further comment.

The Democratic Alliance (DA) has called on the NPA to explain why it would make a deal with Shaik, the former financial adviser of African National Congress (ANC) leader Jacob Zuma.

The Star newspaper reported on Thursday that Shaik would receive R5-million from the state in an agreement on interest earned from seized assets.

The payment settled a dispute over who was entitled to the interest earned on R34-million the state seized from Shaik, said the newspaper, quoting from papers filed with the Durban High Court.

There was R14-million interest at stake and the state settled the dispute by agreeing to pay him half the money — R5-million in cash — while the remaining money was used to settle legal fees, the Star said.

This left the state with R41-million that would be paid into the criminal asset recovery account.

The deal was signed late in 2008 between Shaik’s lawyer and the National Director of Public Prosecutions, the newspaper reported.

One of the terms of the agreement was that it be kept secret with ”no public announcements” without written approval from either party.

The money had gained interest since January 2006 as Shaik failed in bids to both the Supreme Court of Appeal and the Constitutional Court to overturn the forfeiture order.

Meanwhile, the Star reported that Shaik had applied to President Kgalema Motlanthe for a ”reprieve and remission of the confiscated amounts”, in an attempt to get back the R34-million confiscated from him.

The DA called on the NPA to explain the thinking behind the deal.

”We believe that the agreement, if these reports are accurate, is outrageous and makes a mockery out of our justice system. It seems patently obvious that if an initial sum is forfeited, then any subsequent earnings on that amount ought to be forfeited too,” the DA said.

”The DA believes that the NPA needs to make it expressly clear why such a deal was concluded, how it serves the interests of justice, why it was conducted in secrecy, and upon what basis the NPA decided to conclude a negotiated settlement rather than allow the matter to be determined in court.”

‘Mutually beneficial symbiosis’
Shaik is currently in jail on a 15-year-sentence resulting from his conviction of fraud and corruption, including a charge that he made corrupt payments to Zuma.

In the 2005 ruling at the Durban High Court, Judge Hillary Squires said payments made to Zuma by Shaik constituted a benefit under the definition of corruption.

”The case is convincing and really overwhelming,” Judge Squires told the court as he finished weighing the evidence of count one of general corruption against Shaik.

”Even if regarded as loans [as claimed by the defence], the basis on which they were made would in our view constitute a benefit,” the judge said.

Squires said Shaik’s former accountant Celia Bester had continually pointed out and asked him questions about problems she encountered in his financial statements, but she never got an answer.

Approaching the second half of his 165-page verdict, Judge Squires painted a picture of a ”mutually beneficial symbiosis” between Zuma and Shaik.

Shaik would only have made the payments if he was to get something in return, the judge said.

The payments, made through Shaik’s Nkobi group of companies, were made in spite of the group’s own financial difficulties. At a time when payments to Zuma totalled more than R500 000, Nkobi had nearly reached its R450 000 bank overdraft limit.

”The group was essentially borrowing money to give to Zuma,” the judge said.

He pointed to clear evidence of a readiness on Zuma’s part to intervene to the benefit of Shaik’s business interests, despite Nkobi appearing not to be a viable business.

Zuma got involved in Shaik’s attempts to enter into joint ventures with other companies, despite evidence that any such move was likely to be a ”sure failure”.

”There is evidence of Shaik’s readiness to turn to Zuma for help, and of Zuma’s readiness to give it,” the judge said.

As Judge Squires outlined some of the issues on which Shaik had been cross-examined, he said Shaik ”had no scruples” and that his actions showed a ”tendency to avoid an unwanted result”.

However, Judge Squires pointed out that in a criminal trial ”premium has to be placed on truth”. He said Shaik was not an impressive witness.

In many cases, his answers were long and irrelevant and he showed ”flashes of candour”.

This, the judge said ”could have been the result of natural verbosity”. — Sapa