7.12.2012

Auditors' secret report reveals how millions flowed to President Zuma

Exposed: An auditors' report lays bare how a range of benefactors funded a reckless president's lifestyle by more than R7-million.

The Mail & Guardian can reveal crucial evidence in the case against President Jacob Zuma - evidence that was kept hidden when the National Prosecuting Authority (NPA) abandoned its prosecution of him. The M&G is publishing the key findings of the confidential September 2006 forensic report that auditors KPMG prepared for Zuma’s trial. The report exposes the president as a "kept politician" - a financial freeloader who accepted money and favours on a routine and increasingly extravagant basis not only from his so-called financial adviser, Schabir Shaik, but also from other benefactors, including Nelson Mandela. Running to about 500 pages, the "draft" report - although it is understood to be the final version - is based on tens of thousands of documents Scorpions investigators had seized from Shaik, Zuma and others.

The report contains dramatic new disclosures including:

Former president Mandela came to Zuma’s rescue with a R1-million cheque on June 23 2005. This was just nine days after then-president Thabo Mbeki fired Zuma as his deputy and three days after the NPA announced it would charge Zuma. The Mandela transfer, which has never been reported before, suggests that the retired elder statesman intervened directly in the battle between Mbeki and Zuma to back the latter in his hour of need. Before this, Zuma was more than R400 000 overdrawn on his various bank accounts;

Payments ordered by Shaik continued, and in fact accelerated, long after the M&G revealed in November 2002 that the Scorpions were investigating Zuma and long after Shaik was put on trial in 2004. Payment even continued for a short period after Shaik’s conviction in June 2005, until Shaik resigned as Zuma’s financial adviser the following month. Altogether 783 payments from Shaik or his Nkobi group for Zuma’s benefit were identified, amounting to R4 072 500 - well beyond the figure of about R1.25-million known at the time of Shaik’s trial. Zuma appears to have repaid less than R500 000 of this by the end of February 2006;

KPMG asserts that Zuma benefited from benefactors other than Shaik and Mandela to the value of at least another R3-million. They included politically connected businessperson Jürgen Kögl; Zuma’s friend, Nelspruit businessperson Nora Fakude-Nkuna; Durban mogul Vivian Reddy; Zuma’s nephew Khulubuse Zuma, who provided cash that was used to partially repay Reddy; Zuma attorney Julie Mahomed; some unknown benefactors; and French defence company Thomson-CSF. It was Thomson (later renamed Thales) that promised a payment of R500 000 a year for Zuma’s benefit in the notorious "encrypted fax", although only R250 000 is known to have been paid;

It appears that Zuma may also have benefited from another arms deal company, Ferrostaal, which won the submarine contract; and

Large commercial banks bent over backwards to accommodate Zuma because of his political position and accommodated Shaik because of his association with Zuma. This was despite the fact that Zuma had a terrible credit profile and defaulted regularly.

The KPMG report was prepared on the Scorpions’ instructions ahead of Zuma’s high court appearance in Pietermaritzburg in September 2006. Prosecutors had applied for a postponement to formulate a new charge sheet based on additional material seized during the August 2005 raids that followed Shaik’s conviction - including, for the first time, raids on Zuma’s home and office. They also asked for time to deal with Zuma’s challenge to the legality of those raids. Judge Herbert Msimang refused the postponement and the case was struck from the roll without the report being tabled. It remained hidden throughout the protracted legal battles that saw the NPA clear the path to prosecution and until April 7 2009 when the then acting national director of public prosecutions, Mokotedi Mpshe, buried it by deciding to abandon the case just days before the national election that propelled Zuma to the presidency. Against the views of the prosecuting team, Mpshe ruled that Zuma’s rights to a fair trial had been poisoned by perceived meddling revealed in the so-called Zuma spy tapes. Now the M&G’s disclosure of the wealth of evidence available to the prosecution deepens the controversy surrounding Mpshe’s decision. It also raises the stakes for the Democratic Alliance bid to have that decision reviewed. Finally, it lays bare in excruciating detail the ongoing recklessness of Zuma’s financial relationships. Those relationships not only lay the basis for the current Nkandla scandal, but expose fundamental questions about Zuma’s fitness for office. […] (Mail & Guardian)

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