The case, tried in the Durban and Coast Local Division of the High Court before Judge Hilary Squires, established a fraudulent and corrupt relationship between Durban-based businessman Schabir Shaik and former South African leader Jacob Zuma.
Shaik's trial was the subject of intense media attention due to the involvement of several high-profile members of the South African government.
[1] Appointed MEC for Economic Affairs and Tourism in KwaZulu-Natal in May 1994[2] 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.
They had a profitable and discreet business relationship, which was only visible in a few unusual and incomplete documents and contracts, most of which were undated, and some were signed in the wrong places.
[5] He knew that every month Zuma spent more money than his salary, and that he was writing bad cheques 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.
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 corvettes.
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.
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.
[25] 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.
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.
[27] 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: Furthermore, we are convinced that ... there is no need for the 'Heath Unit' to be involved in any 'investigation' of the defence acquisition.
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."
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."
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."
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.
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 assets and liabilities.
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.
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.
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."
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."
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.
Gavin Woods, who headed Parliament's Committee on Public Accounts (Scopa), told the court that they wanted a thorough investigation of the arms deal.
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.
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 leader of the United Democratic Movement, Bantu Holomisa, issued a press release strongly in favour of charging Zuma.
[1] His support did appear to decline significantly (but not entirely collapse) after being charged with an unrelated rape case late in 2005, which led to him suspending his activities within the ANC.
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.