Schabir Shaik
Encyclopedia
Schabir Shaik is a South Africa
n 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. On 2 June 2005, he was found guilty of corruption
and fraud
, which also led to the dismissal of Zuma two weeks later from his position as Deputy President.
, Shaik studied electrical engineering
at the M.L. Sultan Technikon
, but was caught cheating in a High Voltage Engineering T5 exam on 28 May 1990 and was barred for 12 months. He claimed to have obtained a master's degree
, but no record of this was found at the Technikon; he later admitted he did not earn the qualification.
He had a long-standing friendship with Jacob Zuma
, who needed assistance with his finances after returning from political exile
in Mozambique
in 1990. Zuma had been elected Chairperson of the African National Congress
, and Shaik assisted him financially, mostly in the form of interest-free loan
s with no date of repayment.
On 27 February 1995, Shabir Shaik established a company known as Nkobi Holdings, using the family name of the late ANC Treasurer Thomas Nkobi
, without consent and approval of the Nkobi family.
Nkobi Holding was initially wholly owned by Shaik. The shareholding went through various permutations subsequently, however Shaik was at all relevant times a director of, and exercised effective control over, all the corporate entities within the Nkobi group.
In 1994 he failed in an effort that would have seen Malaysian partners paying off the ANC's huge R 40 million overdraft
, which was taken out in preparation for the 1994 general election
. His brother, Chippy Shaik, was in charge of arms
acquisition at the Department of Defence, which allowed Shaik to bid on a lucrative contract to supply Valour class patrol corvettes to the South African Navy
.
On 21 May 1996, Nkobi Holdings and the French
defence contractor Thomson-CSF
went into a joint venture as Thomson Holdings, a South African company. It tendered for various contracts, among which the upgrading of Durban International Airport
, a national identity card, road projects for the N3
and N4
highway
s, the third cellular telephone network, and smart card
technology. A company called Kobitech which is part of the Nkobi Holdings group, was initially a one-third shareholder in a consortium (under the name Prodiba) to produce the South African driving licence card. The first card was produced on 2 March 1998, a contract that was initially awarded for 5 years, later extended and then renewed for another 5 year period ending on 28 March 2009. During the second half of 2007 Kobitech sold their share in Prodiba to one of the remaining shareholders, Face Technologies.
and corruption
at the Durban High Court from 11 October 2004. During the course of the trial, Shaik admitted that he falsified his qualifications and business achievements.
The trial ended on 4 May 2005, with Judge Hilary Squires
delivering his verdict on 2 June. Shaik was found guilty on two counts of corruption
and one count of fraud
, with judge Squires stating in his 165-page verdict that there was "overwhelming" evidence of a corrupt relationship between Shaik and Zuma. The fraud charge related to testimony by Ahmed Paruk, Shaik's auditor, that Shaik held a meeting with him and Shaik's financial manager, where it was agreed that false journal
entries be made in order to alter Nkobi Holdings' financial statements
. The second corruption charge relates to alleged attempts to solicit a bribe to Zuma from Thomson CSF.
On 8 June he was sentenced
to 15 years' imprisonment
on each of the two counts of corruption, as well as 3 years on the count of fraud. The sentences will run concurrently, giving him an effective 15 year prison term. He has been given leave to appeal
against this sentence on 26 July, and his bail
has been extended until then. His appeal to the Supreme Court of Appeal failed on 6 November
As a consequence of the ruling, Zuma was dismissed from his post as deputy president by President
Thabo Mbeki
on 14 June.
On 2 October 2007 his appeal to the Constitutional Court for his conviction and sentence for corruption and fraud was turned down with the court ruling that "An appeal against conviction and sentence does not bear any reasonable prospect of success".
However, the court ruled that there might be a constitutional issue related to the seizure of assets belonging to him and his company and granted leave to appeal on that point. The court dismissed this appeal in April 2008. Prosecutor in the case, Anton Steynberg, said afterwards that Shaik's only option now is to petition then-President Kgalema Motlanthe.
hospital in Durban, Professor DP Naidoo, personally discharged Shaik in December 2008 because he was considered well enough to leave. However, Shaik remained in the ward until his parole. There have been several accusations of Shaik violating the terms of his parole - including staying at Thanda Private Game Reserve for three nights in June 2009. The Department of Correctional Services said Shaik's parole officer had given him permission to recuperate in a luxury lodge.
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...
n businessman from the Berea
Berea, Durban
The Berea is a ridge above the city of Durban, KwaZulu-Natal, South Africa on the northern side which overlooks the city centre and the Indian Ocean. Berea is also used as a collective designation for the suburbs in the area...
, 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...
, who rose to prominence due to his close association with South African President 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....
during his time as Deputy President. On 2 June 2005, he was found guilty of corruption
Corporate crime
In criminology, corporate crime refers to crimes committed either by a corporation , or by individuals acting on behalf of a corporation or other business entity...
and 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...
, which also led to the dismissal of Zuma two weeks later from his position as Deputy President.
Early life
A South African of Indian originAsians in South Africa
The majority of the Asian South African population is Indian in origin, most of them descended from indentured workers transported to work in the 19th century on the sugar plantations of the eastern coastal area, then known as Natal. They are largely English speaking, although many also retain the...
, Shaik studied electrical engineering
Electrical engineering
Electrical engineering is a field of engineering that generally deals with the study and application of electricity, electronics and electromagnetism. The field first became an identifiable occupation in the late nineteenth century after commercialization of the electric telegraph and electrical...
at the M.L. Sultan Technikon
Durban University of Technology
The Durban University of Technology is a University of Technology in KwaZulu-Natal, South Africa. It was formed in 2002 by the merger of Technikon Natal and ML Sultan Technikon and was previously known as the Durban Institute of Technology. It has four campuses in Durban, and two in Pietermaritzburg...
, but was caught cheating in a High Voltage Engineering T5 exam on 28 May 1990 and was barred for 12 months. He claimed to have obtained a master's degree
Master's degree
A master's is an academic degree granted to individuals who have undergone study demonstrating a mastery or high-order overview of a specific field of study or area of professional practice...
, but no record of this was found at the Technikon; he later admitted he did not earn the qualification.
He had a long-standing friendship with 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....
, who needed assistance with his finances after returning from political exile
Exile
Exile means to be away from one's home , while either being explicitly refused permission to return and/or being threatened with imprisonment or death upon return...
in Mozambique
Mozambique
Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest...
in 1990. Zuma had been elected Chairperson 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...
, and Shaik assisted him financially, mostly in the form of 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 date of repayment.
On 27 February 1995, Shabir Shaik established a company known as Nkobi Holdings, using the family name of the late ANC Treasurer Thomas Nkobi
Thomas Nkobi
Thomas Titus Nkobi was a senior leader of the South African African National Congress and a key figure in the Anti-Apartheid movement...
, without consent and approval of the Nkobi family.
Nkobi Holding was initially wholly owned by Shaik. The shareholding went through various permutations subsequently, however Shaik was at all relevant times a director of, and exercised effective control over, all the corporate entities within the Nkobi group.
In 1994 he failed in an effort that would have seen Malaysian partners paying off the ANC's huge R 40 million 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...
, which was taken out in preparation for the 1994 general election
South African general election, 1994
The South African general election of 1994 was an election held in South Africa to mark the end of apartheid, therefore also the first held with universal adult suffrage. The election was conducted under the direction of the Independent Electoral Commission .Millions queued in lines over a three...
. His brother, Chippy Shaik, was in charge of 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...
acquisition at the Department of Defence, which allowed Shaik to bid on a lucrative contract to supply Valour class patrol corvettes to the South African Navy
South African Navy
The South African Navy is the navy of the Republic of South Africa.-Formation:The South African Navy can trace its official origins back to the SA Naval Service, which was established on 1 April 1922....
.
On 21 May 1996, Nkobi Holdings and 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...
defence contractor 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....
went into a joint venture as Thomson Holdings, a South African company. It tendered for various contracts, among which the upgrading of 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 national identity card, road projects for 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...
highway
Highway
A highway is any public road. In American English, the term is common and almost always designates major roads. In British English, the term designates any road open to the public. Any interconnected set of highways can be variously referred to as a "highway system", a "highway network", or a...
s, the third cellular telephone network, and 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...
technology. A company called Kobitech which is part of the Nkobi Holdings group, was initially a one-third shareholder in a consortium (under the name Prodiba) to produce the South African driving licence card. The first card was produced on 2 March 1998, a contract that was initially awarded for 5 years, later extended and then renewed for another 5 year period ending on 28 March 2009. During the second half of 2007 Kobitech sold their share in Prodiba to one of the remaining shareholders, Face Technologies.
Fraud and corruption
Shaik was put on trial for fraudFraud
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...
and corruption
Corporate crime
In criminology, corporate crime refers to crimes committed either by a corporation , or by individuals acting on behalf of a corporation or other business entity...
at the Durban High Court from 11 October 2004. During the course of the trial, Shaik admitted that he falsified his qualifications and business achievements.
The trial ended on 4 May 2005, with Judge 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....
delivering his verdict on 2 June. Shaik was found guilty on two counts of corruption
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...
and one count of 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...
, with judge Squires stating in his 165-page verdict that there was "overwhelming" evidence of a corrupt relationship between Shaik and Zuma. The fraud charge related to testimony by Ahmed Paruk, Shaik's auditor, that Shaik held a meeting with him and Shaik's financial manager, where it was agreed that false journal
Double-entry bookkeeping system
A double-entry bookkeeping system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts....
entries be made in order to alter Nkobi Holdings' financial statements
Financial statements
A financial statement is a formal record of the financial activities of a business, person, or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by...
. The second corruption charge relates to alleged attempts to solicit a bribe to Zuma from Thomson CSF.
On 8 June he was sentenced
Sentence (law)
In law, a sentence forms the final explicit act of a judge-ruled process, and also the symbolic principal act connected to his function. The sentence can generally involve a decree of imprisonment, a fine and/or other punishments against a defendant convicted of a crime...
to 15 years' imprisonment
Imprisonment
Imprisonment is a legal term.The book Termes de la Ley contains the following definition:This passage was approved by Atkin and Duke LJJ in Meering v Grahame White Aviation Co....
on each of the two counts of corruption, as well as 3 years on the count of fraud. The sentences will run concurrently, giving him an effective 15 year prison term. He has been given leave 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....
against this sentence on 26 July, and his 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...
has been extended until then. His appeal to the Supreme Court of Appeal failed on 6 November
As a consequence of the ruling, Zuma was dismissed from his post as deputy president by 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...
on 14 June.
On 2 October 2007 his appeal to the Constitutional Court for his conviction and sentence for corruption and fraud was turned down with the court ruling that "An appeal against conviction and sentence does not bear any reasonable prospect of success".
However, the court ruled that there might be a constitutional issue related to the seizure of assets belonging to him and his company and granted leave to appeal on that point. The court dismissed this appeal in April 2008. Prosecutor in the case, Anton Steynberg, said afterwards that Shaik's only option now is to petition then-President Kgalema Motlanthe.
Parole
On 3 March 2009 Shaik was released on medical parole, after serving two years and four months of his 15-year prison term. The head of cardiology at Inkosi Albert LutuliAlbert Lutuli
Albert John Lutuli , also known by his Zulu name Mvumbi, was a South African teacher and politician. Lutuli was elected president of the African National Congress , at the time an umbrella organisation that led opposition to the white minority government in South Africa...
hospital in Durban, Professor DP Naidoo, personally discharged Shaik in December 2008 because he was considered well enough to leave. However, Shaik remained in the ward until his parole. There have been several accusations of Shaik violating the terms of his parole - including staying at Thanda Private Game Reserve for three nights in June 2009. The Department of Correctional Services said Shaik's parole officer had given him permission to recuperate in a luxury lodge.
External links
- News24 - Shaik loses appeal 02/10/2007 11:24 - (SA)
- The Schabir Shaik trial story in short from the Arms Deal Virtual Press Office
- Schabir Shaik on Trial, a special feature from SABCnews.com
- Other news coverage of the trial: BBC News, News24, Independent Online, Mail & Guardian
- Full text of the judgement
- The Nkobi Clan Distances itself from Shaik's Nkobi Holdings from the Arms Deal Virtual Press Office