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Schabir Shaik Judgment

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Schabir Shaik Judgment THE SUPREME COURT OF APPEAL OF SOUTH AFRICA Reportable Case no: 62/06 In the matter between: SCHABIR SHAIK First Appellant NKOBI HOLDINGS (PTY) LTD Second Appellant NKOBI INVESTMENTS (PTY) LTD Third Appellant KOBIFIN (PTY) LTD Fourth Appellant KOBITEC (PTY) LTD Fifth Appellant PROCONSULT (PTY) LTD Sixth Appellant PROCON AFRICA (PTY) LTD Seventh Appellant KOBITEC TRANSPORT SYSTEMS (PTY) LTD Eighth Appellant CLEGTON (PTY) LTD Ninth Appellant FLORYN INVESTMENTS (PTY) LTD Tenth Appellant CHARTLEY INVESTMENTS (PTY) LTD Eleventh Appellant and THE STATE Respondent _____________________________________________________________________________ Coram : Howie P, Mpati DP, Streicher, Navsa, et Heher JJA Date of hearing: 25-26 September 2006 Date of delivery: 6 November 2006 Summary : Businessman and several corporate entities paying highly placed public official with significant political influence to intervene in commercial negotiations/transactions for their benefit ─ held to have contravened s 1(1)(a)(i) or (ii) of the Corruption Act 94 of 1992 ─ irregular write-offs of loans in annual financial statements ─ constituting fraud ─ admissibility of ‘encrypted fax’ in terms of s 3 of the Law of Evidence Amendment Act 45 of 1988 ─ together with other evidence proved a conspiracy to bribe public official ─ sentence ─ seriousness of offence of corruption discussed ─ no substantial and compelling circumstances justifying departure from prescribed minimum sentences. Neutral citation: This judgment may be referred to as Shaik v The State (1) [2006] SCA 134 (RSA). _____________________________________________________________________________ JUDGMENT _____________________________________________________________________________ THE COURT 2 THE COURT: INTRODUCTION [1] This appeal which was heard together with an application for leave to extend its scope follows on a protracted criminal trial before Squires J and assessors in the Durban High Court. 1 The trial lasted more than six months, generated huge media interest and attracted a great deal of public attention. More than 40 witnesses testified. The record comprises more than 12 000 pages with oral testimony constituting more than 6 000 pages. Although, as will become apparent, some legal issues such as the admissibility of documents will be addressed, the matter is ultimately to be decided within a fairly narrow compass. Conclusions will largely follow upon an analysis of the facts that are common cause in conjunction with an assessment of the merits of the evidence adduced by or on behalf of the appellants and the State. Although the parties are variously applicants for leave or appellants we shall, for convenience, refer to them throughout as appellants. [2] The first appellant, Mr Schabir Shaik (Shaik), is a businessman. The other appellants are corporate entities which he controlled or in which he had a major interest. It is common cause that between October 1995 and September 2002, Shaik personally, and some of the corporate appellants, made numerous payments totalling a substantial amount of money to or on behalf of Mr Jacob Zuma (Zuma), the erstwhile Deputy President of the Republic of South Africa. [3] At material times Zuma held high political office. He was a member of the KwaZulu-Natal legislature and the Member of the Executive Council (MEC) for Economic Affairs and Tourism for that province from April 1994 to June 1999. 2 He became a member of the National Assembly of Parliament in June 1999. He was appointed the Deputy President of the Republic of South Africa on 19 June 1 See paras [60] and [61] infra . 2 Members of the Executive Council of Provinces are generally referred to as provincial Ministers. 3 1999 and became leader of Government business in Parliament. During the period referred to in para [2] he held high office within the structures of the African National Congress (ANC), the ruling party in Parliament. He was the ANC’s National Chairman until 1997, and thereafter became its Deputy President. THE OFFENCES CHARGED [4] Discovery of the payments referred to in para [2] ultimately led to the prosecution of the appellants. They were charged with three main counts and in each instance with a number of lesser alternate charges. The main charge on count 1 was that of contravening s 1(1)(a)(i) and (ii) of the Corruption Act 94 of 1992 (the CA). 3 The State alleged that during the period referred to in para [2], Shaik and one or other of the corporate appellants had made 238 separate payments of money either directly to or for the benefit of Zuma. The State alleged that the object of the payments was to influence Zuma to use his name and 3 Section 1(1)(a)(ii) and (ii) of the Corruption Act reads as follows: ‘1. Prohibition on offer or acceptance of benefit for commission of act in relation to certain powers or duties ─ (1) Any person ─ (a) who corruptly gives or offers or agrees to give any benefit of whatever nature which is not legally due, to any person upon whom ─ (i) any power has been conferred or who has been charged with any duty by virtue of any employment or the holding of any office or any relationship of agency or any law, or to anyone else, with the intention to influence the person upon whom such power has been conferred or who has been charged with such duty to commit or omit to do any act in relation to such power or duty; or (ii) any power has been conferred or who has been charged with any duty by virtue of any employment or the holding of any office or any relationship of agency or any law and who committed or omitted to do any act constituting any excess of such power or any neglect of such duty, with the intention to reward the person upon whom such power has been conferred or who has been charged with such duty because he so acted; or (b) . shall be guilty of an offence.’ 4 political influence for the benefit of Shaik’s business enterprises or as an ongoing reward for having done so. [5] The second main count was one of fraud. It was common cause that for the financial year ending 28 February 1999 an amount of R1 282 027.63 was irregularly written off in the annual financial statements of the Nkobi group of companies, under the banner of which most of the corporate appellants operated. The amounts that were written-off in the books of the fourth appellant comprised the respective debit loan accounts of Shaik in the amount of R736 700.73 (this included his debit loan account in the amount of R57 668 with the seventh appellant as well as an amount of R171 000 transferred from his director’s fees to his loan account), of the ninth appellant in the amount of R198 167.40 and of the tenth appellant in the amount of R347 159.50. It was further common cause that the amounts were written-off on the false pretext that they were expenses incurred in the setting-up of a card-form driver’s licence project in which the Nkobi group had an interest. It was alleged that this misrepresentation concealed the true nature of the writing-off which was to extinguish the debts owed by the abovementioned persons to the fourth appellant which debts included R268 775.69 of the money paid to or on behalf of Zuma. This fact, so it was alleged, was concealed from shareholders, creditors, the bank that provided overdraft facilities and from the South African Revenue Services. [6] The main charge on count 3 was one in terms of s 1(1)(a)(i) of the CA. The circumstances giving rise to this charge were as follows: During September 1999, Ms Patricia de Lille, a member of Parliament, made corruption allegations concerning a lucrative armaments deal (the arms deal) concluded between the Government of the Republic of South Africa and a number of overseas and local contractors. She proposed a motion for the appointment of a judicial commission of enquiry. It was contemplated that for purposes of the enquiry the investigation was to be carried out by the then special investigation 5 unit headed by the former Mr Justice Heath. Eventually a number of State institutions, including the Auditor-General, the National Prosecution Authority and the Public Protector became involved. Thomson-CSF (Thomson), a French company, with whom Shaik had participated as part of a consortium (the German Frigate Consortium), had acquired a significant stake in the arms deal, in particular, the provision of an armaments suite for corvettes for the South African Navy purchased by the Government. The State alleged that Shaik’s participation (as a black empowerment partner) in the consortium, through a local company called African Defence Systems (ADS), in which Thomson acquired a majority stake, was as a result of Zuma’s influence. It alleged further, that during September 1999 and at Durban, Shaik, acting for himself and the corporate appellants, met Alain Thétard, a Thomson executive, and that a suggestion was made that in return for payment by Thomson to Zuma of R500 000 per year, until dividends from ADS became payable to Shaik, Zuma would shield Thomson from the anticipated enquiry and thereafter support and promote Thomson’s business interests in South Africa. The State alleged that the suggestion was then approved by Thomson’s head office in Paris and that a seal was set on this arrangement at a meeting in Durban during March 2000 involving Thétard, Shaik and Zuma. This led to a document described in the evidence as ‘the encrypted fax’ being sent by Thétard from Pretoria to Thomson’s head office. An important issue is the admissibility of Thétard’s original hand-written draft of the faxed communication which the State alleges is a record of the conspiracy to corruption involving Thomson, Zuma and Shaik, which is central to this count.
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