Schabir Shaik trial
Encyclopedia
The Schabir Shaik trial was one of the most important court trials in post-apartheid
South Africa
. The case, tried in Durban High Court before Judge
Hilary Squires
, proved the fraud
ulent and corrupt
relationship between Durban
-based businessman Schabir Shaik
and South African politician
and anti-apartheid leader Jacob Zuma
. Schaik's writing off of Zuma's significant personal loans in 1999 had raised suspicions about their financial activities. Shaik's petition of appeal to the Supreme Court of Appeal
has failed; Shaik started to serve his sentence of 15 years on 9 November 2006.
After Shaik's brother Chippy was suspended from the Department of Defence for his involvement in a corrupt arms deal, Schabir Shaik was arrested in 2001 for the possession of secret documents, after which investigators found that he was involved in corrupt dealings with Zuma as well as fraud. He was brought to trial in October 2004, pleading not guilty.
Shaik's trial was the subject of intense media attention due to the involvement of several high-profile members of the South African government
. Though Shaik claimed that his financial dealings were legitimate, on 30 May 2005, the Durban High Court handed down its final judgment. He was pronounced guilty of corruption for paying Zuma 1.2 million Rand
(US$
185,000) to further their relationship and for soliciting a bribe from the French
arms
company Thomson-CSF
, as well as guilty of fraud for writing off more than R1 million (US$ 154,000) of Zuma's unpaid debts.
Judge Squires sentenced Shaik to two terms of 15 years for corruption and one term of 3 years for fraud, to be served concurrently. Following the decision, Zuma stepped down from his seat in Parliament
, though he remained deputy president of the African National Congress
at that time. Thabo Mbeki
, the standing President
, also sacked Zuma as his deputy. Zuma was later elected as the President of the ANC.
Shaik then attempted an appeal at the Supreme Court of Appeal
. However, all five judges under President Craig Howie unanimously rejected his appeal, and agreed the correct sentence had been given over a year prior.
(ANC) leaders returned home to financially ruined lives, such as Jacob Zuma, one of the most important Zulu ANC members. Appointed MEC for Economic Affairs and Tourism in KwaZulu-Natal
in May 1994 by the new ANC government, he thought that he needed much more than his salary
from that position to make up for the time he spent fighting.
Schabir Shaik, a member of the wealthy and important Shaik family of Durban
, proved to be important in reestablishing Zuma's life. They had a profitable and discreet business relationship, which was only visible in a few unusual and incomplete documents and contract
s, most of which were undated, and some were signed
in the wrong places. Almost every document dealt with interest-free loan
s with no specified date of repayment. In 1999, Shaik wrote all the loans off without any explanation.
Shaik, who was Zuma's financial advisor at the time, knew that Zuma could never afford to repay the sum of the loans on his salary. He also knew, since he had access to all of Zuma's financial records, about unpaid home loans, an overdraft of 66,500 Rand
(US$
10,200) in an account with Nedbank
, one of South Africa's largest banks, another debt owed to Wesbank
, and more money borrowed but not owed yet to Permanent Bank
and Standard Bank
. He knew that every month Zuma spent more money than his salary, and that he was writing bad cheque
s and failing to meet debit card
payments. Shaik did not expect to be paid back, however, as he was buying influence with Zuma, which was used to win government contracts for his company, Nkobi Holdings
.
Through a series of share transactions, Nkobi Holdings merged with the French
company Thomson-CSF
, one of the largest arms
companies in the world. On 21 May 1996, Thomson Holdings, the name of the newly merged corporations and now a South African company, was established. The first joint ventures Thomson made bids for were not for arms: instead, they made bids for an upgrade to Durban International Airport
, a new ID Card for South African citizens, expansions to the N3
and N4
, a new mobile phone
network, and new smart card
technologies.
government to the ANC government had left it with few influential friends. In order to get an arms contract, it would need strong political backing. Fortunately for Shaik, his brother, Chippy, was in charge of arms acquisition at the Department of Defence. Chippy indicated that he would facilitate matters for Thomson Holdings if its 'position' regarding Chippy and his friends proved acceptable. Otherwise, he would make things difficult.
The international end of the company also invested in the arms deal by buying shares of African Defence Systems, a bidder for one of the lucrative contracts in the arms deal. This bid excluded Nkobi Holdings, which was a shareholder of Thomson-CSF in South Africa—to Shaik's great consternation. In June 1996, Shaik held a meeting to tell his directors that they must gear up to bid for the electronic defence system needed to guide and protect South Africa's newly acquired corvette
s. Shaik said that he would use his political connections in order to facilitate the contracts and tenders, because at that point both Shaik and Zuma were confident that Zuma would be made Deputy President
in the post-Mandela
government. Zuma was given more loans to facilitate the deal for Shaik and to help Nkobi receive more government contracts.
The first newspaper
article hinting at the relationship between Zuma and Shaik appeared at this time; however, it was insignificant. Published in the Cape Times
, it was squeezed in between a report about a gangster
gunned down in Cape Town
and a car accident
that claimed the lives of three people. Later, this article was considered the first mention of the case, although in January 1997 it was a brief news story:
Meanwhile, Shaik and Zuma wanted to establish a new venture, Nkobi Bank, to act as financial advisor to a bidding consortium
on any large-scale public- or private-sector project. The bank would also compete for government and various ministry budgets as a deposit taker. Zuma was appointed as Deputy President in June 1999, and he began consolidating his assets, influence, and bank accounts.
He started by developing his traditional residential village estate at Nkandla
in Zululand
in the rural northern part of KwaZulu-Natal. A contractor
estimated the construction on the estate at R2.4 million (US$370,000), excluding VAT
. Zuma negotiated with the contractor, and the final price was reduced to R1.3 million (US$200,000). Zuma was promised that construction would take six months, but it took nine. The money for the construction was not paid by Zuma himself; instead it was paid in installments by Bohlabela Wheels, Fakude PZN, and some in cash by Durban
businessman Vivien Reddy, both in person by him and on one of his company's cheques.
During subsequent negotiations over the latter part of 1999, Shaik and Thétard agreed to a bribe amount of R1 million (US$154,000), and at a meeting in March 2000, Thétard, Shaik, and Zuma finalised the exchange. At this point, Zuma was in desperate need for money as the bribe was going to cover the continued construction of his Nkandla development, yet Thétard has not transferred any money to Shaik thus far. Shaik demanded an immediate response to this “extremely delicate matter” from Thétard, but Thétard failed to respond and by 19 October, Shaik in his role as Zuma’s financial advisor, attempted to stop all construction on Nkandla, prompting Zuma to tell his contractors to ignore Shaik’s orders. Zuma wrote a cheque for R1 million to his contractors, the payment of which was stopped by Shaik.
By late 2000, Shaik knew that the South African Revenue Service
(SARS) and the Scorpions
would be watching all financial transactions made between him and Zuma, so the international division of Thomson-CSF sent an encrypted
fax
to Nkobi Holdings detailing a “service provider agreement” which updated the contract signed between Nkobi Holdings and Thomson-CSF for the delivery of the Corvettes. This agreement was used to disguise the payment of the bribe. The fax, which was later obtained in a raid on Shaik’s office by the Scorpions, contained a non-bribery clause next to which Shaik wrote “conflicts with intention”, yet despite the careful set-up, Thomson-CSF did not transfer any money to Shaik. Subsequently Zuma went to meet with Thétard in Paris, following which R250,000 (US$38,000) was transferred by Thomson-CSF to the “Jacob Zuma Education Fund”.
As the year progressed, the relationship between Shaik and Zuma had attracted more attention, and by October 2000, South Africa’s leading corruption prosecutor, Judge Willem Heath, formally asked President
Thabo Mbeki
for a proclamation allowing him to investigate the arms deal. Zuma immediately attacked the petition by writing a letter to Gavin Woods
, the chairperson of the Parliamentary Standing Committee on Public Accounts (Scopa). This letter, written in Zuma’s capacity as “Leader of Government Business” in Parliament
states that:
in the Durban High Court. Shaik pleaded not guilty to charges of corruption and fraud on 10 October 2004. He asserted in his plea explanation that the State had misunderstood his dealings with Zuma. He agreed that there was a financial relationship between Zuma and him, but that it was not a corrupt one as the payments he made to Zuma were loans made in friendship. He did not ask for any interest
in the loans because it "offended his religious convictions
". The loans had been made on a revolving credit
agreement. He also denied allegations of fraud, saying money was mistakenly written off in his company's books, but that this was later fixed. To allegations that he was involved in soliciting a bribe for Zuma, he replied that he knew nothing.
In lead prosecutor Billy Downer
's opening address, he said his case would be based on facts and patterns and that "we will principally be talking of the arms deal." The first charge against Shaik was one of general corruption. In their efforts to prove this charge, the State led a number of witnesses to show, as explained by Downer, that Zuma was "on retainer for Shaik."
, Bianca Singh, who gave testimony while accompanied by three bodyguard
s. She stated that "Zuma was quite close to Shaik. They would speak on the phone and he would come to visit." She also testified that Shaik arranged financial affairs for Zuma, managed his bank account
s on the computer
, and discussed his financial situation with him. She concluded by saying that she knew that Shaik said the word Zuma often because she often overheard him while he was on the phone.
The State's next witness was KPMG
forensic auditor
Johan van der Walt, who testified for several hours that the payments made by Shaik to Zuma "sometimes threatened the financial existence of the whole group." He continued that the payments were not sensible for any other purpose than to buy influence with Zuma. Shaik's lawyers argued in cross-examination
that their own forensic auditor showed that payments to Zuma were only a small percentage of the group's turnover
. Van der Walt replied that "one can have a billion rand turnover and still have an overdraft
. If you don't have the money, you can't operate." Van der Walt also stated that Zuma lived well beyond his means, but seemed to accept that other people would pay his debt
s.
Shaik's counsel, François van Zyl, said Shaik would testify that as far as he knew, Zuma had by now paid all his creditors and should have no problem paying him back. Van der Walt replied that whether the money paid to Zuma was a loan or a donation, he reaped the benefits: "My review indicated that Zuma had no access to major funds to repay his debts. The repayments must have taken place outside the period of review." Van Zyl produced a written revolving credit agreement between Shaik and Zuma of which, he said, Parliament was informed. The State said it would dispute its authenticity. Van Zyl also accused Van der Walt of not taking into account that Zuma had repaid some money to Shaik.
Ian McLeod, credit manager at Absa Group Limited
, one of South Africa's largest banks, said that neither Shaik nor Zuma mentioned the agreement when they were asked to make a list of their asset
s and liabilities. From what he saw, he said that he "doubted very much if Zuma could repay Shaik." Tracy O'Brian told the court that she sublet
a flat
to Shaik. Shaik told her that it was for his financial director. She later discovered, however, that when there were complaints about bodyguard
s with gun
s, Zuma lived there. Although Shaik or one of his companies paid the rent, it was always late. She terminated the lease
.
Abdool Qadir Mangerah said that he was a close friend of Zuma. He loaned Zuma R154,000 (US$24,000), and when Zuma could not pay him back, Shaik did. A balance of R4,000 (US$600) was still outstanding. He said that he helped Zuma out of friendship and gave him interest-free loans just like Shaik claimed he did. All Mangerah expected in return was "prays for [his] good health."
The State alleged, however, that several things were done in return. A former business associate of Shaik, Professor Themba Sono, told the court that Shaik told business partners that the Nkobi group could bring "political connectivity" to the table. Shaik said what he meant by political connectivity was Black Economic Empowerment
(BEE). Professor John Lennon of Caledonian University in Glasgow
told the court that Zuma advised him to use Nkobi as the South African partner for a proposed eco-tourism school
. When Lennon seemed hesitant, Shaik threatened to derail the proposal and tell Zuma. A feasibility study for the project was cancelled after the government of the United Kingdom refused an application for funding. Shaik denied that he had anything to do with the sudden decline of the project. He said that his "unfortunate" correspondence with Lennon was prompted by his reaction to being "sidelined."
Zuma intervened when Thomson was hesitant to take Nkobi on as its BEE partner because Mbeki allegedly told them that he had reservations about Shaik and his business ventures. Van der Walt said Zuma intervened in sorting out Nkobi's shareholding in ADS, a company strategically placed to get a multimillion-rand contract in the arms deal. Van Zyl countered that both Mbeki and Mandela were involved in attempts to negotiate a BEE settlement for ADS.
When the Malaysian Renong Group wanted local partners for a Durban development, Zuma proposed Shaik's involvement. Another Absa official testified that Shaik and Zuma were considered a "package deal" when the bank invited Zuma to become a private bank
ing client.
At the end of the testimonies for the first charge, Downer pointed out they need not prove that Zuma did anything out of the ordinary to help Shaik as "you can corrupt a politician by paying him to do something he is paid to do every day."
Shaik told the court that the company's auditors and financial director Colin Isaacs
took full responsibility for the financial side of operations, that he was sure that the accounting books were in order, and that when he became aware of the problem he had it corrected. He had no intention to commit fraud.
Auditing clerk Anthony Reed said he was instructed by Ahmed Paruk to effect the write-off. Paruk said he was instructed by Shaik to do it. He said Shaik told him that there was "no way in which he owed that type of money to his companies".
Former Nkobi accountant Celia Bester said that the money written off was cash bribes paid to "various ministers" by Shaik. The writing-off, she said, was the main trigger for her final resignation. She told Judge Squires that she "saw it purely as bribe money".
As evidence for the charge, Van der Walt said there were clear signs that an "informal corrupt" process was followed, apart from the formal process when South Africa's multibillion-rand arms deal was concluded. Government auditor James Edward van Heerden, who did a special review of the arms acquisition process, also concluded that there were deviations from the accepted arms acquisition practices, with no plausible explanation. He told the court that their conclusions were that there should be a special investigation or forensic audit focusing on the involvement of contractors and subcontractors in the deal.
The most controversial document produced by the State was a fax
ostensibly setting out a bribe agreement between Shaik, Zuma, and Alain Thétard regarding the March 2000 meeting and R1 million (USD $154,000) payment to Zuma. Both the handwritten fax and a disk with a typed copy were handed to the Scorpions by Thétard's former secretary, Sue Delique. Her evidence was backed up by forensic computer expert Bennie Labuschagne and handwriting expert Marius Rehder.
Delique told the court that she was asked to type the note and fax it in encrypted
form to Paris. After she resigned she told Thomson's auditors at the time, Gary Parker and David Read, about it. She refused to give them the documents. She told the court that she did not fax the agreement to Shaik. In response, Shaik testified that he "had nothing to do with Thomson in 2000".
Parker and Read concluded at the end that she was a disgruntled employee. They found no proof of what she told them in Thomson's financial statements, and then dropped the matter. Shaik admitted that there was a meeting between himself, Thétard, and Zuma. But he said it was about a donation for the Jacob Zuma Education Trust.
Singh told the court that an audibly agitated Shaik had phoned her from the golf course
to tell her to tape hearings by the parliamentary standing committee on public accounts when Chippy Shaik was being questioned about the arms deal. She said he told her the next day that they were "focusing on the wrong person". Singh also said that she overheard Shaik calling Zuma the next day. According to her he said: "Hello my brother, Hello JZ. Chippy is under pressure. We really need your help to land this deal." He later asked her to come to Mauritius
with him to meet Thétard.
Singh testified that at that meeting Shaik said they had to discuss "damage control." And he said if the Heath Investigation Unit continued to probe the arms deal and if a certain ANC member opened his mouth "they would be in big trouble." Shortly afterwards the alleged bribe agreement was concluded. Van der Walt said he found a great deal of correspondence about the payment of the money and a service provider agreement that Shaik concluded were used to mask the bribe. Only one payment was made of R250,000 (US$38,000); however, nothing was done to enforce the so-called "service provider agreement."
Shaik denied any attempt to bribe Zuma for protection and told the court that he did not know why Thétard wrote the note setting out the bribe agreement. He also testified that what the State thought was correspondence about the bribe was really about the donation to the education trust. Shaik said that the trust was in financial difficulty in 2000 and the donation was urgently required for them to be in a position to give bursaries for the next year. But Gerhardus Pretorius, who managed the Jacob Zuma Education Trust at the time, told the court that nobody ever told him of a significant donation expected from Thomson. Theunis Benemere, involved in the day-to-day administration of the trust, said that "there was always enough money".
Former Judge Willem Heath told the court his unit was confident it would be included in the multi-agency probe into the arms deal. His unit was the most dangerous by far if there was evidence of corruption as it had the power to have the deal cancelled on "public interest" grounds. Heath said he was baffled when Mbeki refused to allow them to investigate. He said "I have no doubt that if objective consideration was applied the President would have no choice but to issue a proclamation". Heath's two former right-hand men, Gerhard Visagie and Jannie Lubbe, echoed his sentiments.
The president of the Independent Democrats, Patricia de Lille
, told the court she was handed information by people whose identity she did not disclose. She first asked for a commission of inquiry into the arms deal. When that was refused she asked Mbeki to issue a proclamation to allow the Heath unit to investigate. She said that her "role was to pass on the information and hope and pray that it will be investigated. I was ostracised, but I did it for the people of the country. I wanted to assist government to root out the few bad apples." She was accused by Van Zyl of using the arms deal to attack the ANC, but she retorted that her "attack was on corruption."
Gavin Woods
, who headed Parliament's Committee on Public Accounts (Scopa), told the court that they wanted a thorough investigation of the arms deal. It would have included their own investigation as well as one by four agencies including the Heath Special Investigating Unit. He received a letter from Zuma, written in his capacity as leader of government business, saying that government saw no need for the Heath Unit to be involved. At the time, Woods said there was no clarity on what it was the "leader of government business" was supposed to do. Under cross-examination
he conceded that the Director of Public Prosecutions, the Auditor-General and the Public Protector also wanted Heath excluded.
Zuma said that when he was asked in Parliament if the revelations at the Shaik trial were a blot on the moral
regeneration programme headed by him, he replied, "not at all, I don't look at it that way. Not at all, honourable members."
for the "meticulous and careful manner" in which they "presented their cases", which he said made the "court's task easier," especially when seen in the light of the difficult and complex nature of the case. The formal part of the trial ended shortly after the defence counsel asked the court to consider the possibility that Shaik had sought a bribe of R500,000 (US$77,000) a year from Thompson-CSF without Zuma's knowledge. The defence stated, however, that this version should only be considered if the court rejected their original argument.
Judge Squires reconvened the court on 7 June to deliver his sentence. Describing corruption as a "pervasive and insidious evil," he found that Shaik's actions had been aimed at advancing his business interests through an association with Zuma:
Judge Squires also said that he was convinced that Shaik gave Zuma "a sustained level of support" designed to maintain a lifestyle the politician could never have afforded otherwise, and that this was an investment in Zuma's political profile from which Shaik expected to benefit. Judge Squires continued that the payments "were not ... to a low-salaried bureaucrat
seduced into temptation," and that the higher the status of the beneficiary, the more serious the offence.
Judge Squires found Shaik guilty of a generally corrupt relationship with Zuma and for soliciting a bribe for Zuma from Thomson-CSF. He was also found guilty of fraud for irregularly writing off loans from the books of Nkobi Group.
Judge Squires dismissed Shaik's anti-apartheid "struggle credentials", saying what he had sought to achieve was exactly the same as the apartheid regime's "command of the economy" by a privileged few, which is exactly what the struggle had sought to replace. The judge sentenced Shaik to the minimum prescribed sentence of 15 years on each of the corruption counts. Shaik was sentenced to three years for fraud; however, Judge Squires said he found mitigating circumstances for not imposing the same minimum penalty for the fraud charge, as Shaik had not been the instigator and the crime had no adverse effect on any other party.
Judge Squires ordered that the three sentences run concurrently and described Shaik as a man with commendable vision, ambition, and energy, but one who appears to have lost his moral compass
and scruples
. The judge also imposed a series of fines on 10 companies related to the Nkobi Group.
Concluding the sentencing proceedings, Squires said:
Shaik immediately announced his intentions to appeal
the sentence, and Judge Squires set aside 26 July as the date of a hearing for Shaik's leave to appeal.
-aligned parties immediately praised the verdict as it weakened the moral position of the ANC. Groups hostile to the ANC immediately demanded that Zuma be charged with corruption as well.
The leader of the United Democratic Movement, Bantu Holomisa
, issued a press release strongly in favour of charging Zuma. He stated that "we [the UDM] hope that this was merely phase one of the prosecution process: Schabir Shaik has been prosecuted as the corruptor. Phase two must necessarily be to prosecute the corruptee. It would be an embarrassment for the country to have a serving deputy president arrested and prosecuted. Therefore President Mbeki
must fire Mr Zuma if he does not resign". The press report concluded by saying that the 15-year jail sentence was confirmation that South African society
would not tolerate those who were guilty of corruption.
Democratic Alliance MP Sheila Camerer
echoed Holomisa's sentiments: "The DA [Democratic Alliance] has maintained since August 2003 that the deputy president ... should have been charged with Shaik. We believe he should be charged now in view of Judge Squires' finding that he was complicit in both counts of corruption". Independent Democrats leader Patricia de Lille also said the sentence should prove a deterrent: "Schabir Shaik has been handed the justice all South Africans needed to hear and that this should prove as a deterrent for anyone in the future. We should all celebrate the restoration of faith in our country by the local and international community with this judgement."
The Congress of South African Trade Unions
(Cosatu), the most powerful trade union
in South Africa, openly supported Zuma. However, its spokesman, Paul Notyhawa, said that it respected the court's decision: "We definitely have to respect the court's decision in the matter, noting that the accused has reserved his right to appeal". Notyhawa said that Cosatu had never objected to the trial of Shaik, but he went on to say that "what we object to is that the judge erred in implicating a person who has not been part of the proceedings and has been denied his right to respond in a proper forum".
The majority of the press called for Zuma to resign. Under intense pressure from within the ANC as well as the public, Zuma's spokesperson Lakela Kaunda announced on 14 June 2005 that Zuma would resign his seat in parliament. The ANC issued a statement later in the day accepting Zuma's resignation. Kaunda further explained that Zuma would stop his activities in parliament the next day and would write a letter to the speaker to inform her of his decision, clarifying that "the bottom line is that you won't see him [Zuma] in parliament again, at least not as a member".
The ANC's statement read that it "respects the position taken by Deputy President Zuma to resign as a member of parliament". Zuma, in response to the ANC, said that "President Thabo Mbeki has taken a decision regarding my presence in government and cabinet. It is the president's prerogative to take such a decision, in the context of, and within his authority as the president of the republic in light of this decision. I have also offered to resign my seat in parliament not as an admission of guilt of any kind, but in order to make it easier for the ANC and government to function in parliament." According to the statement, Zuma planned to stay on as deputy president of the ANC. Cosatu immediately reacted negatively to Zuma's resignation, prompting protest
s and calls for Zuma to be reinstated, although they represented a minority of the South African public.
Zuma was charged with corruption as a result of the trial, although he continued to enjoy support from leftist and Zulu elements of the ANC. His support did appear to decline significantly (but not entirely collapse) after being charged with an unrelated rape
late in 2005, which led to him suspending his activities within the ANC.
in the Supreme Court of Appeal
in Bloemfontein
against his fraud and one of his corruption convictions. After being granted his reprieve, Shaik told reporters in a press conference that he was grateful and intended to use the options made available to him. He concluded the press conference by stating that "obviously one would have liked to be victorious on all the charges, but we are in the legal process".
Many reporters asked him if he would petition the Chief Justice to appeal the convictions that Judge Squires denied grounds of appeal, to which Shaik replied that his legal team was considering the matter. The National Prosecuting Authority
, as represented by spokesperson Makhosini Nkosi in front of the courthouse, said that it accepted Judge Squires' decision, despite some disappointment. Nkosi also said that "We [the NPA] are satisfied that the judge applied his mind correctly to all the facts. In some cases, we are naturally disappointed, but even then you appreciate the reasons for coming to that decision".
Judge Squires extended Shaik's R100,000 (US$15,000) bail
. It took more than a year for the Supreme Court of Appeal Court to pass a ruling on the two appeals as well as the application from Shaiks' legal team for leave of appeal on the second corruption charge (which Judge Squires had declined to award).
However, on 6 November 2006, President Craig Howie on a bench of 5 judges, rejected this right to appeal. The appeal judges found that Shaik was correctly convicted on three charges of corruption and that the sentence was fair. Furthermore, the court found that Shaik's actions went against the very fibre of the constitution.
Shaik reported to jail to start serving his effective 15-year sentence.
On 3 March 2009 Shaik was released on medical parole, after serving two years and four months of his 15-year prison term.
in Johannesburg, against his conviction and sentence, and consequential steps. In October 2007 the Court dismissed most elements of the application, finding that most of the grounds for appeal submitted by Shaik had no prospect of success. However, it granted leave to appeal against the order for confiscation of his assets.
Shaik and his companies (Nkobi Holdings and Nkobi Investments) then appealed to the Constitutional Court to question the validity of the confiscation order regarding R33 million of their assets. The original court authorised the confiscation under the Prevention of Organised Crime Act (POCA), since it held that they constitute proceeds of crime. In April 2008 the Constitutional Court dismissed this appeal, finding that Shaik and his companies had received their shareholdings in Thint, a major ground for the asset forfeiture order, as a result of "the corrupt payments" made to Zuma, and that the remainder of the order related to dividends that accrued due to this shareholding. The court found that POCA permitted that all benefits that had arisen from the commission of a crime, whether directly or indirectly, may be confiscated by the trial court after it convicted an accused; and that the trial court had discretion to determine the appropriate amount in any given case. The court concluded that Shaik and his companies had not shown that the High Court improperly exercised its discretion to determine the amount to be confiscated nor that the order confiscating both the shareholding and the dividend was "disturbingly inappropriate".
History of South Africa in the apartheid era
Apartheid was a system of racial segregation enforced by the National Party governments of South Africa between 1948 and 1994, under which the rights of the majority 'non-white' inhabitants of South Africa were curtailed and white supremacy and Afrikaner minority rule was maintained...
South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
. The case, tried in Durban High Court before Judge
Judge
A judge is a person who presides over court proceedings, either alone or as part of a panel of judges. The powers, functions, method of appointment, discipline, and training of judges vary widely across different jurisdictions. The judge is supposed to conduct the trial impartially and in an open...
Hilary Squires
Hilary Squires
Hilary Gwyn Squires is a retired South African judge and barrister, who was brought in to preside over the Schabir Shaik fraud and corruption trial in Durban, South Africa, so as not to tie up legal proceedings elsewhere while the trial proceeded....
, proved the fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
ulent and corrupt
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
relationship between Durban
Durban
Durban is the largest city in the South African province of KwaZulu-Natal and the third largest city in South Africa. It forms part of the eThekwini metropolitan municipality. Durban is famous for being the busiest port in South Africa. It is also seen as one of the major centres of tourism...
-based businessman Schabir Shaik
Schabir Shaik
Schabir Shaik is a South African businessman from the Berea, Durban, who rose to prominence due to his close association with South African President Jacob Zuma during his time as Deputy President...
and South African politician
Politics of South Africa
The Republic of South Africa is a unitary, parliamentary republic. The President of South Africa is both head of state and head of government; in the same manner as the prime minister of other nations, the President is elected by the National Assembly and must enjoy the confidence of the Assembly...
and anti-apartheid leader Jacob Zuma
Jacob Zuma
Jacob Gedleyihlekisa Zuma is the President of South Africa, elected by parliament following his party's victory in the 2009 general election....
. Schaik's writing off of Zuma's significant personal loans in 1999 had raised suspicions about their financial activities. Shaik's petition of appeal to the Supreme Court of Appeal
Supreme Court of Appeal of South Africa
The Supreme Court of Appeal is an appellate court in South Africa; it is the highest appeal court except in constitutional matters, which are ultimately decided by the Constitutional Court...
has failed; Shaik started to serve his sentence of 15 years on 9 November 2006.
After Shaik's brother Chippy was suspended from the Department of Defence for his involvement in a corrupt arms deal, Schabir Shaik was arrested in 2001 for the possession of secret documents, after which investigators found that he was involved in corrupt dealings with Zuma as well as fraud. He was brought to trial in October 2004, pleading not guilty.
Shaik's trial was the subject of intense media attention due to the involvement of several high-profile members of the South African government
Government of South Africa
The Republic of South Africa is a constitutional democracy with a three-tier system of government and an independent judiciary, operating in a nearly unique system that combines aspects of parliamentary and presidential systems. Legislative authority is held by the Parliament of South Africa...
. Though Shaik claimed that his financial dealings were legitimate, on 30 May 2005, the Durban High Court handed down its final judgment. He was pronounced guilty of corruption for paying Zuma 1.2 million Rand
South African rand
The rand is the currency of South Africa. It takes its name from the Witwatersrand , the ridge upon which Johannesburg is built and where most of South Africa's gold deposits were found. The rand has the symbol "R" and is subdivided into 100 cents, symbol "c"...
(US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
185,000) to further their relationship and for soliciting a bribe from the French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
arms
Weapon
A weapon, arm, or armament is a tool or instrument used with the aim of causing damage or harm to living beings or artificial structures or systems...
company Thomson-CSF
Thomson-CSF
Thomson-CSF was a major electronics and defence contractor. In December 2000 it was renamed Thales Group.-History:In 1879 Elihu Thomson and Edwin Houston formed the Thomson-Houston Electric Company in the United States....
, as well as guilty of fraud for writing off more than R1 million (US$ 154,000) of Zuma's unpaid debts.
Judge Squires sentenced Shaik to two terms of 15 years for corruption and one term of 3 years for fraud, to be served concurrently. Following the decision, Zuma stepped down from his seat in Parliament
Parliament of South Africa
The Parliament of South Africa is South Africa's legislature and under the country's current Constitution is composed of the National Assembly and the National Council of Provinces....
, though he remained deputy president of the African National Congress
African National Congress
The African National Congress is South Africa's governing Africanist political party, supported by its tripartite alliance with the Congress of South African Trade Unions and the South African Communist Party , since the establishment of non-racial democracy in April 1994. It defines itself as a...
at that time. Thabo Mbeki
Thabo Mbeki
Thabo Mvuyelwa Mbeki is a South African politician who served two terms as the second post-apartheid President of South Africa from 14 June 1999 to 24 September 2008. He is also the brother of Moeletsi Mbeki...
, the standing President
President of South Africa
The President of the Republic of South Africa is the head of state and head of government under South Africa's Constitution. From 1961 to 1994, the head of state was called the State President....
, also sacked Zuma as his deputy. Zuma was later elected as the President of the ANC.
Shaik then attempted an appeal at the Supreme Court of Appeal
Supreme Court of Appeal of South Africa
The Supreme Court of Appeal is an appellate court in South Africa; it is the highest appeal court except in constitutional matters, which are ultimately decided by the Constitutional Court...
. However, all five judges under President Craig Howie unanimously rejected his appeal, and agreed the correct sentence had been given over a year prior.
Zuma's return from exile
When apartheid ended, many former exiled African National CongressAfrican National Congress
The African National Congress is South Africa's governing Africanist political party, supported by its tripartite alliance with the Congress of South African Trade Unions and the South African Communist Party , since the establishment of non-racial democracy in April 1994. It defines itself as a...
(ANC) leaders returned home to financially ruined lives, such as Jacob Zuma, one of the most important Zulu ANC members. Appointed MEC for Economic Affairs and Tourism in KwaZulu-Natal
KwaZulu-Natal
KwaZulu-Natal is a province of South Africa. Prior to 1994, the territory now known as KwaZulu-Natal was made up of the province of Natal and the homeland of KwaZulu....
in May 1994 by the new ANC government, he thought that he needed much more than his salary
Salary
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis....
from that position to make up for the time he spent fighting.
Schabir Shaik, a member of the wealthy and important Shaik family of Durban
Durban
Durban is the largest city in the South African province of KwaZulu-Natal and the third largest city in South Africa. It forms part of the eThekwini metropolitan municipality. Durban is famous for being the busiest port in South Africa. It is also seen as one of the major centres of tourism...
, proved to be important in reestablishing Zuma's life. They had a profitable and discreet business relationship, which was only visible in a few unusual and incomplete documents and contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
s, most of which were undated, and some were signed
Signature
A signature is a handwritten depiction of someone's name, nickname, or even a simple "X" that a person writes on documents as a proof of identity and intent. The writer of a signature is a signatory. Similar to a handwritten signature, a signature work describes the work as readily identifying...
in the wrong places. Almost every document dealt with interest-free loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
s with no specified date of repayment. In 1999, Shaik wrote all the loans off without any explanation.
Shaik, who was Zuma's financial advisor at the time, knew that Zuma could never afford to repay the sum of the loans on his salary. He also knew, since he had access to all of Zuma's financial records, about unpaid home loans, an overdraft of 66,500 Rand
South African rand
The rand is the currency of South Africa. It takes its name from the Witwatersrand , the ridge upon which Johannesburg is built and where most of South Africa's gold deposits were found. The rand has the symbol "R" and is subdivided into 100 cents, symbol "c"...
(US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
10,200) in an account with Nedbank
Nedbank
Nedbank is one of the largest banks in South Africa; however it is one of the newest banks to be incorporated in South Africa. It is headquartered in Johannesburg...
, one of South Africa's largest banks, another debt owed to Wesbank
WesBank
WesBank is one of the largest credit installment institutions in South Africa and South Africa’s largest provider of loans for cars.Wesbank is a division of FirstRand Bank Limited and partners with various motor industry stakeholders to deliver its major product, which is vehicle finance....
, and more money borrowed but not owed yet to Permanent Bank
Permanent Bank (South Africa)
Permanent Bank was a small South African bank, headquartered in Durban, KwaZulu-Natal. It was bought by Nedbank, and no longer exists as an independent entity....
and Standard Bank
Standard Bank of South Africa
The Standard Bank of South Africa Limited is one of South Africa's largest financial services groups. It operates in 30 countries around the world, including 17 in Africa.-History:...
. He knew that every month Zuma spent more money than his salary, and that he was writing bad cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
s and failing to meet debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
payments. Shaik did not expect to be paid back, however, as he was buying influence with Zuma, which was used to win government contracts for his company, Nkobi Holdings
Nkobi Holdings
Nboki Holdings is an South African investment company started by Durban businessman Schabir Shaik. It is primarily involved in bidding for government service contracts. It was investigated thoroughly for signs of corruption during the Schabir Shaik Trial....
.
Through a series of share transactions, Nkobi Holdings merged with the French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
company Thomson-CSF
Thomson-CSF
Thomson-CSF was a major electronics and defence contractor. In December 2000 it was renamed Thales Group.-History:In 1879 Elihu Thomson and Edwin Houston formed the Thomson-Houston Electric Company in the United States....
, one of the largest arms
Weapon
A weapon, arm, or armament is a tool or instrument used with the aim of causing damage or harm to living beings or artificial structures or systems...
companies in the world. On 21 May 1996, Thomson Holdings, the name of the newly merged corporations and now a South African company, was established. The first joint ventures Thomson made bids for were not for arms: instead, they made bids for an upgrade to Durban International Airport
Durban International Airport
Durban International Airport was the international airport of Durban from 1951 until 2010, when it was replaced by King Shaka International Airport, to the north. The airport is co-located with AFB Durban.-History:...
, a new ID Card for South African citizens, expansions to the N3
N3 (South Africa)
The N3 is a National Route in South Africa, connecting Johannesburg and Durban, respectively South Africa's largest and third-largest cities. Johannesburg is the financial and commercial heartland of South Africa, while Durban is South Africa's key port and one of the busiest ports in the Southern...
and N4
N4 (South Africa)
The N4 is a National Route which forms the South African section of the Walvis Bay to Maputo highway, which links the east and west coasts of Southern Africa...
, a new mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
network, and new smart card
Smart card
A smart card, chip card, or integrated circuit card , is any pocket-sized card with embedded integrated circuits. A smart card or microprocessor cards contain volatile memory and microprocessor components. The card is made of plastic, generally polyvinyl chloride, but sometimes acrylonitrile...
technologies.
Arms deal
Thomson Holdings, through its South African subsidiary, was seeking influence in government circles in this period, as the change from the National PartyNational Party (South Africa)
The National Party is a former political party in South Africa. Founded in 1914, it was the governing party of the country from 4 June 1948 until 9 May 1994. Members of the National Party were sometimes known as Nationalists or Nats. Its policies included apartheid, the establishment of a...
government to the ANC government had left it with few influential friends. In order to get an arms contract, it would need strong political backing. Fortunately for Shaik, his brother, Chippy, was in charge of arms acquisition at the Department of Defence. Chippy indicated that he would facilitate matters for Thomson Holdings if its 'position' regarding Chippy and his friends proved acceptable. Otherwise, he would make things difficult.
The international end of the company also invested in the arms deal by buying shares of African Defence Systems, a bidder for one of the lucrative contracts in the arms deal. This bid excluded Nkobi Holdings, which was a shareholder of Thomson-CSF in South Africa—to Shaik's great consternation. In June 1996, Shaik held a meeting to tell his directors that they must gear up to bid for the electronic defence system needed to guide and protect South Africa's newly acquired corvette
Corvette
A corvette is a small, maneuverable, lightly armed warship, originally smaller than a frigate and larger than a coastal patrol craft or fast attack craft , although many recent designs resemble frigates in size and role...
s. Shaik said that he would use his political connections in order to facilitate the contracts and tenders, because at that point both Shaik and Zuma were confident that Zuma would be made Deputy President
Deputy President of South Africa
The Deputy President of South Africa is the acting President of South Africa when the President is outside the country's borders, unable to fulfill the duties of the office, or when the Presidency is vacant. The Deputy President is also a member of the National Assembly and the Cabinet...
in the post-Mandela
Nelson Mandela
Nelson Rolihlahla Mandela served as President of South Africa from 1994 to 1999, and was the first South African president to be elected in a fully representative democratic election. Before his presidency, Mandela was an anti-apartheid activist, and the leader of Umkhonto we Sizwe, the armed wing...
government. Zuma was given more loans to facilitate the deal for Shaik and to help Nkobi receive more government contracts.
The first newspaper
Newspaper
A newspaper is a scheduled publication containing news of current events, informative articles, diverse features and advertising. It usually is printed on relatively inexpensive, low-grade paper such as newsprint. By 2007, there were 6580 daily newspapers in the world selling 395 million copies a...
article hinting at the relationship between Zuma and Shaik appeared at this time; however, it was insignificant. Published in the Cape Times
Cape Times
The Cape Times is an English language morning newspaper owned by Independent News & Media and published in Cape Town, South Africa. The first edition of the newspaper was published on 27 March 1876 by then editor Frederick York St Leger...
, it was squeezed in between a report about a gangster
Gangster
A gangster is a criminal who is a member of a gang. Some gangs are considered to be part of organized crime. Gangsters are also called mobsters, a term derived from mob and the suffix -ster....
gunned down in Cape Town
Cape Town
Cape Town is the second-most populous city in South Africa, and the provincial capital and primate city of the Western Cape. As the seat of the National Parliament, it is also the legislative capital of the country. It forms part of the City of Cape Town metropolitan municipality...
and a car accident
Car accident
A traffic collision, also known as a traffic accident, motor vehicle collision, motor vehicle accident, car accident, automobile accident, Road Traffic Collision or car crash, occurs when a vehicle collides with another vehicle, pedestrian, animal, road debris, or other stationary obstruction,...
that claimed the lives of three people. Later, this article was considered the first mention of the case, although in January 1997 it was a brief news story:
- 'The police are investigating the circumstances surrounding the theft of classified military documents during an armed robbery at the home of Shamin 'Chippy' Shaik, which were in his car. The suspects were reported to have fled with Shaik's wallet, watch, and briefcase, which contained the documents. Shaik was not injured. Nobody was arrested.'
Meanwhile, Shaik and Zuma wanted to establish a new venture, Nkobi Bank, to act as financial advisor to a bidding consortium
Consortium
A consortium is an association of two or more individuals, companies, organizations or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal....
on any large-scale public- or private-sector project. The bank would also compete for government and various ministry budgets as a deposit taker. Zuma was appointed as Deputy President in June 1999, and he began consolidating his assets, influence, and bank accounts.
He started by developing his traditional residential village estate at Nkandla
Nkandla, KwaZulu-Natal
Nkandla is a town in the uThungulu district of KwaZulu-Natal, South Africa. It is the seat of the Nkandla Local Municipality.The Nkandla region encompasses nearly 160,000 inhabitants, spread relatively sparsely over a large area. Poverty is prevalent, with over 90% unemployment. It has the...
in Zululand
Zulu Kingdom
The Zulu Kingdom, sometimes referred to as the Zulu Empire or, rather imprecisely, Zululand, was a monarchy in Southern Africa that extended along the coast of the Indian Ocean from the Tugela River in the south to Pongola River in the north....
in the rural northern part of KwaZulu-Natal. A contractor
General contractor
A general contractor is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and communication of information to involved parties throughout the course of a building project.-Description:...
estimated the construction on the estate at R2.4 million (US$370,000), excluding VAT
Vat
Vat or VAT may refer to:* A type of container such as a barrel, storage tank, or tub, often constructed of welded sheet stainless steel, and used for holding, storing, and processing liquids such as milk, wine, and beer...
. Zuma negotiated with the contractor, and the final price was reduced to R1.3 million (US$200,000). Zuma was promised that construction would take six months, but it took nine. The money for the construction was not paid by Zuma himself; instead it was paid in installments by Bohlabela Wheels, Fakude PZN, and some in cash by Durban
Durban
Durban is the largest city in the South African province of KwaZulu-Natal and the third largest city in South Africa. It forms part of the eThekwini metropolitan municipality. Durban is famous for being the busiest port in South Africa. It is also seen as one of the major centres of tourism...
businessman Vivien Reddy, both in person by him and on one of his company's cheques.
Nkandla development and selling influence
To finance the continued construction on his estate, Zuma took out a bond, which “Reddy signed as … guarantor for R400,000 [US$60,000].” To continue his influence on Zuma, Reddy also paid the instalments on the bond, which came to nearly R12,000 (USD $1,800) a month. Despite the regular monetary inflow, Zuma’s financial troubles continued due to unforeseen costs in the Nkandla development. Zuma decided, therefore, to sell his political influence. Alan Thétard, then one of Thomson-CSF’s directors, met with Schabir Shaik in Durban on 30 September 1999, during the course of which it was agreed that Thétard would give Shaik money to cover Zuma’s debts in exchange for Zuma’s protection from the commission investigating the arms deal, and ongoing support for any future Thomson-CSF deals with the South African government.During subsequent negotiations over the latter part of 1999, Shaik and Thétard agreed to a bribe amount of R1 million (US$154,000), and at a meeting in March 2000, Thétard, Shaik, and Zuma finalised the exchange. At this point, Zuma was in desperate need for money as the bribe was going to cover the continued construction of his Nkandla development, yet Thétard has not transferred any money to Shaik thus far. Shaik demanded an immediate response to this “extremely delicate matter” from Thétard, but Thétard failed to respond and by 19 October, Shaik in his role as Zuma’s financial advisor, attempted to stop all construction on Nkandla, prompting Zuma to tell his contractors to ignore Shaik’s orders. Zuma wrote a cheque for R1 million to his contractors, the payment of which was stopped by Shaik.
By late 2000, Shaik knew that the South African Revenue Service
South African Revenue Service
The South African Revenue Service is the revenue service of the South African government. It was established by legislation to collect revenue and ensure compliance with tax law...
(SARS) and the Scorpions
Scorpions (South Africa)
The Directorate of Special Operations was a multidisciplinary agency that investigated and prosecuted organised crime and corruption. It was a unit of The National Prosecuting Authority of South Africa. Its staff of 536 consisted of some of the best police, financial, forensic and intelligence...
would be watching all financial transactions made between him and Zuma, so the international division of Thomson-CSF sent an encrypted
Encryption
In cryptography, encryption is the process of transforming information using an algorithm to make it unreadable to anyone except those possessing special knowledge, usually referred to as a key. The result of the process is encrypted information...
fax
Fax
Fax , sometimes called telecopying, is the telephonic transmission of scanned printed material , normally to a telephone number connected to a printer or other output device...
to Nkobi Holdings detailing a “service provider agreement” which updated the contract signed between Nkobi Holdings and Thomson-CSF for the delivery of the Corvettes. This agreement was used to disguise the payment of the bribe. The fax, which was later obtained in a raid on Shaik’s office by the Scorpions, contained a non-bribery clause next to which Shaik wrote “conflicts with intention”, yet despite the careful set-up, Thomson-CSF did not transfer any money to Shaik. Subsequently Zuma went to meet with Thétard in Paris, following which R250,000 (US$38,000) was transferred by Thomson-CSF to the “Jacob Zuma Education Fund”.
As the year progressed, the relationship between Shaik and Zuma had attracted more attention, and by October 2000, South Africa’s leading corruption prosecutor, Judge Willem Heath, formally asked President
President of South Africa
The President of the Republic of South Africa is the head of state and head of government under South Africa's Constitution. From 1961 to 1994, the head of state was called the State President....
Thabo Mbeki
Thabo Mbeki
Thabo Mvuyelwa Mbeki is a South African politician who served two terms as the second post-apartheid President of South Africa from 14 June 1999 to 24 September 2008. He is also the brother of Moeletsi Mbeki...
for a proclamation allowing him to investigate the arms deal. Zuma immediately attacked the petition by writing a letter to Gavin Woods
Gavin Woods (politician)
The Hon Dr. Gavin Woods is the chairman of the standing committee on public accounts and a former member of the Inkatha Freedom Party. He became a member of parliament in 1994 and joined Nadeco in 2005....
, the chairperson of the Parliamentary Standing Committee on Public Accounts (Scopa). This letter, written in Zuma’s capacity as “Leader of Government Business” in Parliament
Parliament of South Africa
The Parliament of South Africa is South Africa's legislature and under the country's current Constitution is composed of the National Assembly and the National Council of Provinces....
states that:
Trial
Schabir Shaik's trial started amid an intense media circusMedia circus
Media circus is a colloquial metaphor, or idiom, describing a news event where the media coverage is perceived to be out of proportion to the event being covered, such as the number of reporters at the scene, the amount of news media published or broadcast, and the level of media hype...
in the Durban High Court. Shaik pleaded not guilty to charges of corruption and fraud on 10 October 2004. He asserted in his plea explanation that the State had misunderstood his dealings with Zuma. He agreed that there was a financial relationship between Zuma and him, but that it was not a corrupt one as the payments he made to Zuma were loans made in friendship. He did not ask for any interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
in the loans because it "offended his religious convictions
Usury
Usury Originally, when the charging of interest was still banned by Christian churches, usury simply meant the charging of interest at any rate . In countries where the charging of interest became acceptable, the term came to be used for interest above the rate allowed by law...
". The loans had been made on a revolving credit
Revolving credit
Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Examples of revolving credits used by consumers include credit cards. Corporate revolving credit facilities are typically used to provide liquidity for a company's day-to-day...
agreement. He also denied allegations of fraud, saying money was mistakenly written off in his company's books, but that this was later fixed. To allegations that he was involved in soliciting a bribe for Zuma, he replied that he knew nothing.
In lead prosecutor Billy Downer
Billy Downer
Advocate William John "Billy" Downer, SC , is a deputy director of public prosecutions with the South African National Prosecuting Authority....
's opening address, he said his case would be based on facts and patterns and that "we will principally be talking of the arms deal." The first charge against Shaik was one of general corruption. In their efforts to prove this charge, the State led a number of witnesses to show, as explained by Downer, that Zuma was "on retainer for Shaik."
First charge: Corruption
The State argued in its first charge of corruption that Shaik had paid Zuma R1.2 million (US$185,000) to further a "general corrupt relationship." To prove this charge, the State gave evidence of all the financial transactions between Shaik and Zuma. The State's first witness for this charge was Shaik's former secretarySecretary
A secretary, or administrative assistant, is a person whose work consists of supporting management, including executives, using a variety of project management, communication & organizational skills. These functions may be entirely carried out to assist one other employee or may be for the benefit...
, Bianca Singh, who gave testimony while accompanied by three bodyguard
Bodyguard
A bodyguard is a type of security operative or government agent who protects a person—usually a famous, wealthy, or politically important figure—from assault, kidnapping, assassination, stalking, loss of confidential information, terrorist attack or other threats.Most important public figures such...
s. She stated that "Zuma was quite close to Shaik. They would speak on the phone and he would come to visit." She also testified that Shaik arranged financial affairs for Zuma, managed his bank account
Bank account
A Bank account is a financial account recording the financial transactions between the customer and the bank and the resulting financial position of the customer with the bank .-Account types:...
s on the computer
Computer
A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
, and discussed his financial situation with him. She concluded by saying that she knew that Shaik said the word Zuma often because she often overheard him while he was on the phone.
The State's next witness was KPMG
KPMG
KPMG is one of the largest professional services networks in the world and one of the Big Four auditors, along with Deloitte, Ernst & Young and PwC. Its global headquarters is located in Amstelveen, Netherlands....
forensic auditor
Audit
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...
Johan van der Walt, who testified for several hours that the payments made by Shaik to Zuma "sometimes threatened the financial existence of the whole group." He continued that the payments were not sensible for any other purpose than to buy influence with Zuma. Shaik's lawyers argued in cross-examination
Cross-examination
In law, cross-examination is the interrogation of a witness called by one's opponent. It is preceded by direct examination and may be followed by a redirect .- Variations by Jurisdiction :In...
that their own forensic auditor showed that payments to Zuma were only a small percentage of the group's turnover
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
. Van der Walt replied that "one can have a billion rand turnover and still have an overdraft
Overdraft
An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn". If there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft...
. If you don't have the money, you can't operate." Van der Walt also stated that Zuma lived well beyond his means, but seemed to accept that other people would pay his debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
s.
Shaik's counsel, François van Zyl, said Shaik would testify that as far as he knew, Zuma had by now paid all his creditors and should have no problem paying him back. Van der Walt replied that whether the money paid to Zuma was a loan or a donation, he reaped the benefits: "My review indicated that Zuma had no access to major funds to repay his debts. The repayments must have taken place outside the period of review." Van Zyl produced a written revolving credit agreement between Shaik and Zuma of which, he said, Parliament was informed. The State said it would dispute its authenticity. Van Zyl also accused Van der Walt of not taking into account that Zuma had repaid some money to Shaik.
Ian McLeod, credit manager at Absa Group Limited
Absa Group Limited
The Absa Group Limited is the largest consumer bank in South Africa.- Overview :Absa is based in Johannesburg and listed on the JSE Limited and is one of South Africa's largest financial institutions...
, one of South Africa's largest banks, said that neither Shaik nor Zuma mentioned the agreement when they were asked to make a list of their asset
Asset
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...
s and liabilities. From what he saw, he said that he "doubted very much if Zuma could repay Shaik." Tracy O'Brian told the court that she sublet
Lease
A lease is a contractual arrangement calling for the lessee to pay the lessor for use of an asset. A rental agreement is a lease in which the asset is tangible property...
a flat
Apartment
An apartment or flat is a self-contained housing unit that occupies only part of a building...
to Shaik. Shaik told her that it was for his financial director. She later discovered, however, that when there were complaints about bodyguard
Bodyguard
A bodyguard is a type of security operative or government agent who protects a person—usually a famous, wealthy, or politically important figure—from assault, kidnapping, assassination, stalking, loss of confidential information, terrorist attack or other threats.Most important public figures such...
s with gun
Gun
A gun is a muzzle or breech-loaded projectile-firing weapon. There are various definitions depending on the nation and branch of service. A "gun" may be distinguished from other firearms in being a crew-served weapon such as a howitzer or mortar, as opposed to a small arm like a rifle or pistol,...
s, Zuma lived there. Although Shaik or one of his companies paid the rent, it was always late. She terminated the lease
Lease
A lease is a contractual arrangement calling for the lessee to pay the lessor for use of an asset. A rental agreement is a lease in which the asset is tangible property...
.
Abdool Qadir Mangerah said that he was a close friend of Zuma. He loaned Zuma R154,000 (US$24,000), and when Zuma could not pay him back, Shaik did. A balance of R4,000 (US$600) was still outstanding. He said that he helped Zuma out of friendship and gave him interest-free loans just like Shaik claimed he did. All Mangerah expected in return was "prays for [his] good health."
The State alleged, however, that several things were done in return. A former business associate of Shaik, Professor Themba Sono, told the court that Shaik told business partners that the Nkobi group could bring "political connectivity" to the table. Shaik said what he meant by political connectivity was Black Economic Empowerment
Black Economic Empowerment
Black Economic Empowerment is a programme launched by the South African government to redress the inequalities of Apartheid by giving previously disadvantaged groups economic opportunities previously not available to them...
(BEE). Professor John Lennon of Caledonian University in Glasgow
Glasgow
Glasgow is the largest city in Scotland and third most populous in the United Kingdom. The city is situated on the River Clyde in the country's west central lowlands...
told the court that Zuma advised him to use Nkobi as the South African partner for a proposed eco-tourism school
School
A school is an institution designed for the teaching of students under the direction of teachers. Most countries have systems of formal education, which is commonly compulsory. In these systems, students progress through a series of schools...
. When Lennon seemed hesitant, Shaik threatened to derail the proposal and tell Zuma. A feasibility study for the project was cancelled after the government of the United Kingdom refused an application for funding. Shaik denied that he had anything to do with the sudden decline of the project. He said that his "unfortunate" correspondence with Lennon was prompted by his reaction to being "sidelined."
Zuma intervened when Thomson was hesitant to take Nkobi on as its BEE partner because Mbeki allegedly told them that he had reservations about Shaik and his business ventures. Van der Walt said Zuma intervened in sorting out Nkobi's shareholding in ADS, a company strategically placed to get a multimillion-rand contract in the arms deal. Van Zyl countered that both Mbeki and Mandela were involved in attempts to negotiate a BEE settlement for ADS.
When the Malaysian Renong Group wanted local partners for a Durban development, Zuma proposed Shaik's involvement. Another Absa official testified that Shaik and Zuma were considered a "package deal" when the bank invited Zuma to become a private bank
Private bank
Private banks are banks that are not incorporated. A private bank is owned by either an individual or a general partner with limited partner...
ing client.
At the end of the testimonies for the first charge, Downer pointed out they need not prove that Zuma did anything out of the ordinary to help Shaik as "you can corrupt a politician by paying him to do something he is paid to do every day."
Second charge: Fraud
The State proved in this charge that Shaik had more than R1 million (US$154,000) written off. Shaik owed this money to companies in the Nkobi group, and included payments made to Zuma. The write-off meant that it disappeared from Nkobi's books. Shaik said that it was a mistake and that he had his auditors fix it in subsequent financial years. Van der Walt said that it did not matter that it was fixed, as it was still a crime, asserting that "you can fix the amounts, but not the irregularity." He said Shaik stood to benefit most from the write-off. He also added that the fact that an auditor was advising him did not reduce his liability as director.Shaik told the court that the company's auditors and financial director Colin Isaacs
Colin Isaacs
Colin Francis Weeber Isaacs is an Ontario environmental consultant, journalist and former political figure. He represented Wentworth in the Legislative Assembly of Ontario from 1979 to 1981 as a New Democratic Party member....
took full responsibility for the financial side of operations, that he was sure that the accounting books were in order, and that when he became aware of the problem he had it corrected. He had no intention to commit fraud.
Auditing clerk Anthony Reed said he was instructed by Ahmed Paruk to effect the write-off. Paruk said he was instructed by Shaik to do it. He said Shaik told him that there was "no way in which he owed that type of money to his companies".
Former Nkobi accountant Celia Bester said that the money written off was cash bribes paid to "various ministers" by Shaik. The writing-off, she said, was the main trigger for her final resignation. She told Judge Squires that she "saw it purely as bribe money".
Third charge: Corruption
For the second charge of corruption against Shaik, the State proved that Shaik had solicited a bribe from French arms company Thomson for Zuma. Zuma agreed to protect Thomson in return.As evidence for the charge, Van der Walt said there were clear signs that an "informal corrupt" process was followed, apart from the formal process when South Africa's multibillion-rand arms deal was concluded. Government auditor James Edward van Heerden, who did a special review of the arms acquisition process, also concluded that there were deviations from the accepted arms acquisition practices, with no plausible explanation. He told the court that their conclusions were that there should be a special investigation or forensic audit focusing on the involvement of contractors and subcontractors in the deal.
The most controversial document produced by the State was a fax
Fax
Fax , sometimes called telecopying, is the telephonic transmission of scanned printed material , normally to a telephone number connected to a printer or other output device...
ostensibly setting out a bribe agreement between Shaik, Zuma, and Alain Thétard regarding the March 2000 meeting and R1 million (USD $154,000) payment to Zuma. Both the handwritten fax and a disk with a typed copy were handed to the Scorpions by Thétard's former secretary, Sue Delique. Her evidence was backed up by forensic computer expert Bennie Labuschagne and handwriting expert Marius Rehder.
Delique told the court that she was asked to type the note and fax it in encrypted
Encryption
In cryptography, encryption is the process of transforming information using an algorithm to make it unreadable to anyone except those possessing special knowledge, usually referred to as a key. The result of the process is encrypted information...
form to Paris. After she resigned she told Thomson's auditors at the time, Gary Parker and David Read, about it. She refused to give them the documents. She told the court that she did not fax the agreement to Shaik. In response, Shaik testified that he "had nothing to do with Thomson in 2000".
Parker and Read concluded at the end that she was a disgruntled employee. They found no proof of what she told them in Thomson's financial statements, and then dropped the matter. Shaik admitted that there was a meeting between himself, Thétard, and Zuma. But he said it was about a donation for the Jacob Zuma Education Trust.
Singh told the court that an audibly agitated Shaik had phoned her from the golf course
Golf course
A golf course comprises a series of holes, each consisting of a teeing ground, fairway, rough and other hazards, and a green with a flagstick and cup, all designed for the game of golf. A standard round of golf consists of playing 18 holes, thus most golf courses have this number of holes...
to tell her to tape hearings by the parliamentary standing committee on public accounts when Chippy Shaik was being questioned about the arms deal. She said he told her the next day that they were "focusing on the wrong person". Singh also said that she overheard Shaik calling Zuma the next day. According to her he said: "Hello my brother, Hello JZ. Chippy is under pressure. We really need your help to land this deal." He later asked her to come to Mauritius
Mauritius
Mauritius , officially the Republic of Mauritius is an island nation off the southeast coast of the African continent in the southwest Indian Ocean, about east of Madagascar...
with him to meet Thétard.
Singh testified that at that meeting Shaik said they had to discuss "damage control." And he said if the Heath Investigation Unit continued to probe the arms deal and if a certain ANC member opened his mouth "they would be in big trouble." Shortly afterwards the alleged bribe agreement was concluded. Van der Walt said he found a great deal of correspondence about the payment of the money and a service provider agreement that Shaik concluded were used to mask the bribe. Only one payment was made of R250,000 (US$38,000); however, nothing was done to enforce the so-called "service provider agreement."
Shaik denied any attempt to bribe Zuma for protection and told the court that he did not know why Thétard wrote the note setting out the bribe agreement. He also testified that what the State thought was correspondence about the bribe was really about the donation to the education trust. Shaik said that the trust was in financial difficulty in 2000 and the donation was urgently required for them to be in a position to give bursaries for the next year. But Gerhardus Pretorius, who managed the Jacob Zuma Education Trust at the time, told the court that nobody ever told him of a significant donation expected from Thomson. Theunis Benemere, involved in the day-to-day administration of the trust, said that "there was always enough money".
Former Judge Willem Heath told the court his unit was confident it would be included in the multi-agency probe into the arms deal. His unit was the most dangerous by far if there was evidence of corruption as it had the power to have the deal cancelled on "public interest" grounds. Heath said he was baffled when Mbeki refused to allow them to investigate. He said "I have no doubt that if objective consideration was applied the President would have no choice but to issue a proclamation". Heath's two former right-hand men, Gerhard Visagie and Jannie Lubbe, echoed his sentiments.
The president of the Independent Democrats, Patricia de Lille
Patricia de Lille
Patricia de Lille is a South African politician and Mayor of Cape Town. She is also, concurrently, the leader of the Independent Democrats, a South African political party which she formed in 2003 during a floor-crossing window...
, told the court she was handed information by people whose identity she did not disclose. She first asked for a commission of inquiry into the arms deal. When that was refused she asked Mbeki to issue a proclamation to allow the Heath unit to investigate. She said that her "role was to pass on the information and hope and pray that it will be investigated. I was ostracised, but I did it for the people of the country. I wanted to assist government to root out the few bad apples." She was accused by Van Zyl of using the arms deal to attack the ANC, but she retorted that her "attack was on corruption."
Gavin Woods
Gavin Woods (politician)
The Hon Dr. Gavin Woods is the chairman of the standing committee on public accounts and a former member of the Inkatha Freedom Party. He became a member of parliament in 1994 and joined Nadeco in 2005....
, who headed Parliament's Committee on Public Accounts (Scopa), told the court that they wanted a thorough investigation of the arms deal. It would have included their own investigation as well as one by four agencies including the Heath Special Investigating Unit. He received a letter from Zuma, written in his capacity as leader of government business, saying that government saw no need for the Heath Unit to be involved. At the time, Woods said there was no clarity on what it was the "leader of government business" was supposed to do. Under cross-examination
Cross-examination
In law, cross-examination is the interrogation of a witness called by one's opponent. It is preceded by direct examination and may be followed by a redirect .- Variations by Jurisdiction :In...
he conceded that the Director of Public Prosecutions, the Auditor-General and the Public Protector also wanted Heath excluded.
Zuma said that when he was asked in Parliament if the revelations at the Shaik trial were a blot on the moral
Moral
A moral is a message conveyed or a lesson to be learned from a story or event. The moral may be left to the hearer, reader or viewer to determine for themselves, or may be explicitly encapsulated in a maxim...
regeneration programme headed by him, he replied, "not at all, I don't look at it that way. Not at all, honourable members."
Squires' judgement
The Defence rested its case on 7 April 2005, which was followed by the State's final arguments on 28 April. Judge Squires said that he would not be prepared to give any judgment before 30 May. In his final statements, Judge Squires thanked the defence and the prosecutorProsecutor
The prosecutor is the chief legal representative of the prosecution in countries with either the common law adversarial system, or the civil law inquisitorial system...
for the "meticulous and careful manner" in which they "presented their cases", which he said made the "court's task easier," especially when seen in the light of the difficult and complex nature of the case. The formal part of the trial ended shortly after the defence counsel asked the court to consider the possibility that Shaik had sought a bribe of R500,000 (US$77,000) a year from Thompson-CSF without Zuma's knowledge. The defence stated, however, that this version should only be considered if the court rejected their original argument.
Judge Squires reconvened the court on 7 June to deliver his sentence. Describing corruption as a "pervasive and insidious evil," he found that Shaik's actions had been aimed at advancing his business interests through an association with Zuma:
- "His corporate empire's progress and prosperity was plainly linked to the possibility that Jacob Zuma would finally ascend to the highest political office. What was important to him was the achievement of a large multi-corporate business group ... And the power that goes with that and close association with the greatest in the land. It is precisely in such circumstances that corruption works".
Judge Squires also said that he was convinced that Shaik gave Zuma "a sustained level of support" designed to maintain a lifestyle the politician could never have afforded otherwise, and that this was an investment in Zuma's political profile from which Shaik expected to benefit. Judge Squires continued that the payments "were not ... to a low-salaried bureaucrat
Bureaucrat
A bureaucrat is a member of a bureaucracy and can comprise the administration of any organization of any size, though the term usually connotes someone within an institution of a government or corporation...
seduced into temptation," and that the higher the status of the beneficiary, the more serious the offence.
Judge Squires found Shaik guilty of a generally corrupt relationship with Zuma and for soliciting a bribe for Zuma from Thomson-CSF. He was also found guilty of fraud for irregularly writing off loans from the books of Nkobi Group.
Judge Squires dismissed Shaik's anti-apartheid "struggle credentials", saying what he had sought to achieve was exactly the same as the apartheid regime's "command of the economy" by a privileged few, which is exactly what the struggle had sought to replace. The judge sentenced Shaik to the minimum prescribed sentence of 15 years on each of the corruption counts. Shaik was sentenced to three years for fraud; however, Judge Squires said he found mitigating circumstances for not imposing the same minimum penalty for the fraud charge, as Shaik had not been the instigator and the crime had no adverse effect on any other party.
Judge Squires ordered that the three sentences run concurrently and described Shaik as a man with commendable vision, ambition, and energy, but one who appears to have lost his moral compass
Morality
Morality is the differentiation among intentions, decisions, and actions between those that are good and bad . A moral code is a system of morality and a moral is any one practice or teaching within a moral code...
and scruples
Scruples
The word scruples or scruple can mean: – a doubt or hesitation that troubles the conscience or that comes from the difficulty of determining whether something is right...
. The judge also imposed a series of fines on 10 companies related to the Nkobi Group.
Concluding the sentencing proceedings, Squires said:
- "I do not think I am overstating anything when I say that this phenomenon [of corruption] can truly be likened to a cancer eating away remorselessly at the fabric of corporate privacy and extending its baleful effect into all aspects of administrative functions, whether state official or private sector manager. If it is not checked, it becomes systemic. And the after-effects of systemic corruptionSystemic corruptionSystemic corruption is corruption which is primarily due to a weaknesses of an organisation or process.It can be contrasted with individual officials or agents who act corruptly within the system....
can quite readily extend to the corrosion of any confidence in the integrity of anyone who has a duty to discharge, especially a duty to discharge to the public."
- "One can hopefully discount the prospect of it happening in this country, but it is that sort of increasing disaffection which leads and has led on other parts of our continent and elsewhere to coups d'étatCoup d'étatA coup d'état state, literally: strike/blow of state)—also known as a coup, putsch, and overthrow—is the sudden, extrajudicial deposition of a government, usually by a small group of the existing state establishment—typically the military—to replace the deposed government with another body; either...
or the rise of populace leaders who in turn manipulate politics for even greater private benefit ... This is the last step in a thousand mile journey."
Shaik immediately announced his intentions to appeal
Appeal
An appeal is a petition for review of a case that has been decided by a court of law. The petition is made to a higher court for the purpose of overturning the lower court's decision....
the sentence, and Judge Squires set aside 26 July as the date of a hearing for Shaik's leave to appeal.
Fallout
The political nature of the trial prompted immediate reactions from all sides of the political and economic spectrum in South Africa. Non-ANCAfrican National Congress
The African National Congress is South Africa's governing Africanist political party, supported by its tripartite alliance with the Congress of South African Trade Unions and the South African Communist Party , since the establishment of non-racial democracy in April 1994. It defines itself as a...
-aligned parties immediately praised the verdict as it weakened the moral position of the ANC. Groups hostile to the ANC immediately demanded that Zuma be charged with corruption as well.
The leader of the United Democratic Movement, Bantu Holomisa
Bantu Holomisa
Bantubonke Harrington Holomisa is a South African Member of Parliament and President of the United Democratic Movement.Holomisa was born in Mqanduli, Eastern Cape. He joined the Transkei Defence Force in 1976 and had become a Brigadier by 1985...
, issued a press release strongly in favour of charging Zuma. He stated that "we [the UDM] hope that this was merely phase one of the prosecution process: Schabir Shaik has been prosecuted as the corruptor. Phase two must necessarily be to prosecute the corruptee. It would be an embarrassment for the country to have a serving deputy president arrested and prosecuted. Therefore President Mbeki
Thabo Mbeki
Thabo Mvuyelwa Mbeki is a South African politician who served two terms as the second post-apartheid President of South Africa from 14 June 1999 to 24 September 2008. He is also the brother of Moeletsi Mbeki...
must fire Mr Zuma if he does not resign". The press report concluded by saying that the 15-year jail sentence was confirmation that South African society
Culture of South Africa
South Africa is known for its ethnic and cultural diversity. Therefore, there is no single culture of South Africa.The South African black majority still has a substantial number of rural inhabitants who lead largely impoverished lives...
would not tolerate those who were guilty of corruption.
Democratic Alliance MP Sheila Camerer
Sheila Camerer
Sheila Margaret Camerer is a South African politician and senior Member of Parliament of the main opposition Democratic Alliance.Although Camerer's father, Robert Badenhorst-Durandt had been a Member of Parliament for the ruling National Party , as a young lawyer in the mid-1970s she worked on the...
echoed Holomisa's sentiments: "The DA [Democratic Alliance] has maintained since August 2003 that the deputy president ... should have been charged with Shaik. We believe he should be charged now in view of Judge Squires' finding that he was complicit in both counts of corruption". Independent Democrats leader Patricia de Lille also said the sentence should prove a deterrent: "Schabir Shaik has been handed the justice all South Africans needed to hear and that this should prove as a deterrent for anyone in the future. We should all celebrate the restoration of faith in our country by the local and international community with this judgement."
The Congress of South African Trade Unions
Congress of South African Trade Unions
The Congress of South African Trade Unions is a trade union federation in South Africa. It was founded in 1985 and is the biggest of the country’s three main trade union federations, with 21 affiliated trade unions, altogether organising 1.8 million workers.-Establishment:COSATU was established in...
(Cosatu), the most powerful trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
in South Africa, openly supported Zuma. However, its spokesman, Paul Notyhawa, said that it respected the court's decision: "We definitely have to respect the court's decision in the matter, noting that the accused has reserved his right to appeal". Notyhawa said that Cosatu had never objected to the trial of Shaik, but he went on to say that "what we object to is that the judge erred in implicating a person who has not been part of the proceedings and has been denied his right to respond in a proper forum".
The majority of the press called for Zuma to resign. Under intense pressure from within the ANC as well as the public, Zuma's spokesperson Lakela Kaunda announced on 14 June 2005 that Zuma would resign his seat in parliament. The ANC issued a statement later in the day accepting Zuma's resignation. Kaunda further explained that Zuma would stop his activities in parliament the next day and would write a letter to the speaker to inform her of his decision, clarifying that "the bottom line is that you won't see him [Zuma] in parliament again, at least not as a member".
The ANC's statement read that it "respects the position taken by Deputy President Zuma to resign as a member of parliament". Zuma, in response to the ANC, said that "President Thabo Mbeki has taken a decision regarding my presence in government and cabinet. It is the president's prerogative to take such a decision, in the context of, and within his authority as the president of the republic in light of this decision. I have also offered to resign my seat in parliament not as an admission of guilt of any kind, but in order to make it easier for the ANC and government to function in parliament." According to the statement, Zuma planned to stay on as deputy president of the ANC. Cosatu immediately reacted negatively to Zuma's resignation, prompting protest
Protest
A protest is an expression of objection, by words or by actions, to particular events, policies or situations. Protests can take many different forms, from individual statements to mass demonstrations...
s and calls for Zuma to be reinstated, although they represented a minority of the South African public.
Zuma was charged with corruption as a result of the trial, although he continued to enjoy support from leftist and Zulu elements of the ANC. His support did appear to decline significantly (but not entirely collapse) after being charged with an unrelated rape
Rape
Rape is a type of sexual assault usually involving sexual intercourse, which is initiated by one or more persons against another person without that person's consent. The act may be carried out by physical force, coercion, abuse of authority or with a person who is incapable of valid consent. The...
late in 2005, which led to him suspending his activities within the ANC.
Supreme Court of Appeal
Judge Squires granted Shaik the right to an appealAppeal
An appeal is a petition for review of a case that has been decided by a court of law. The petition is made to a higher court for the purpose of overturning the lower court's decision....
in the Supreme Court of Appeal
Supreme Court of Appeal of South Africa
The Supreme Court of Appeal is an appellate court in South Africa; it is the highest appeal court except in constitutional matters, which are ultimately decided by the Constitutional Court...
in Bloemfontein
Bloemfontein
Bloemfontein is the capital city of the Free State Province of South Africa; and, as the judicial capital of the nation, one of South Africa's three national capitals – the other two being Cape Town, the legislative capital, and Pretoria, the administrative capital.Bloemfontein is popularly and...
against his fraud and one of his corruption convictions. After being granted his reprieve, Shaik told reporters in a press conference that he was grateful and intended to use the options made available to him. He concluded the press conference by stating that "obviously one would have liked to be victorious on all the charges, but we are in the legal process".
Many reporters asked him if he would petition the Chief Justice to appeal the convictions that Judge Squires denied grounds of appeal, to which Shaik replied that his legal team was considering the matter. The National Prosecuting Authority
National Prosecuting Authority
The Constitution of the Republic of South Africa , created a single National Prosecution Authority , which is governed by the National Prosecuting Authority Act...
, as represented by spokesperson Makhosini Nkosi in front of the courthouse, said that it accepted Judge Squires' decision, despite some disappointment. Nkosi also said that "We [the NPA] are satisfied that the judge applied his mind correctly to all the facts. In some cases, we are naturally disappointed, but even then you appreciate the reasons for coming to that decision".
Judge Squires extended Shaik's R100,000 (US$15,000) bail
Bail
Traditionally, bail is some form of property deposited or pledged to a court to persuade it to release a suspect from jail, on the understanding that the suspect will return for trial or forfeit the bail...
. It took more than a year for the Supreme Court of Appeal Court to pass a ruling on the two appeals as well as the application from Shaiks' legal team for leave of appeal on the second corruption charge (which Judge Squires had declined to award).
However, on 6 November 2006, President Craig Howie on a bench of 5 judges, rejected this right to appeal. The appeal judges found that Shaik was correctly convicted on three charges of corruption and that the sentence was fair. Furthermore, the court found that Shaik's actions went against the very fibre of the constitution.
Shaik reported to jail to start serving his effective 15-year sentence.
On 3 March 2009 Shaik was released on medical parole, after serving two years and four months of his 15-year prison term.
Constitutional Court
Shaik applied for leave to appeal to the Constitutional CourtConstitutional Court of South Africa
The Constitutional Court of South Africa was established in 1994 by South Africa's first democratic constitution: the Interim Constitution of 1993. In terms of the 1996 Constitution the Constitutional Court established in 1994 continues to hold office. The court began its first sessions in February...
in Johannesburg, against his conviction and sentence, and consequential steps. In October 2007 the Court dismissed most elements of the application, finding that most of the grounds for appeal submitted by Shaik had no prospect of success. However, it granted leave to appeal against the order for confiscation of his assets.
Shaik and his companies (Nkobi Holdings and Nkobi Investments) then appealed to the Constitutional Court to question the validity of the confiscation order regarding R33 million of their assets. The original court authorised the confiscation under the Prevention of Organised Crime Act (POCA), since it held that they constitute proceeds of crime. In April 2008 the Constitutional Court dismissed this appeal, finding that Shaik and his companies had received their shareholdings in Thint, a major ground for the asset forfeiture order, as a result of "the corrupt payments" made to Zuma, and that the remainder of the order related to dividends that accrued due to this shareholding. The court found that POCA permitted that all benefits that had arisen from the commission of a crime, whether directly or indirectly, may be confiscated by the trial court after it convicted an accused; and that the trial court had discretion to determine the appropriate amount in any given case. The court concluded that Shaik and his companies had not shown that the High Court improperly exercised its discretion to determine the amount to be confiscated nor that the order confiscating both the shareholding and the dividend was "disturbingly inappropriate".
Footnotes
- Department of Foreign Affairs: Tribute to South Africa's Minister of Foreign Affairs
- ANC: Jacob Gedleyihlekisa Zuma
- News24: Shaik Clan Ready for Verdict
- News24: Zuma Lived the Expensive Life
- High Court of South Africa: Summary of Substantial Facts in Terms of Section 144(3)(a) of Act 51 of 1977
- Institute for Justice and Reconciliation: Economic Transformation News
- Sunday Times
- The Star: The Story of the State v Schabir Shaik and Others
- SAPA: Chippy Shaik's Name Dropped at Brother's Trial
- IPO Africa: Shaik faces 2004 high court trial
- Sunday Times: How the case against Shaik implicates deputy president
- SABC News: Shaik thought political connections would help: witness
- iAfrica: Zuma Lawyer Contradicts Loan Evidence
- The Star: The story of the State v Schabir Shaik and others
- Business in Africa: Mortgaging a Nation
- IPO Africa: The State Versus Schabir Shaik
- News24: MEC to testify in Shaik trial
- SABC News: Shaik cross-examination enters day three
- Sunday Times: Cosatu stands by Zuma's right to fair treatment
- The Herald: Zuma’s jewel village ‘built with bribes’
- Mail & Guardian: Scorpions Probe Jacob Zuma
- AllAfrica.com: Corruption Trial Pressures Mbeki, Facing G8 Summit, to Fire Deputy
- SABC News: Friday - October 29, 2004 - Open ended loans
- The Star: How he was found guilty - Part five
- News24: Full transcript of Shaik judgment
- News24: Shaik hints at French witness
- World Socialist Web Site: Arms corruption scandal erupts in South Africa
- SABC News: Highlights of last weeks of 2004
- iAfrica: De Lille testifies at Shaik trial
- BBC News: The rise and fall of Tony Yengeni