Thales South Africa, the French arms company subsidiary that is expected to stand trial alongside former president Jacob Zuma, believes the office of the National Director of Public Prosecutions (NDPP) lacks the evidence to charge the company with racketeering. 

Instead, the company argued in the Pietermaritzburg High Court on Monday that it had a legitimate business relationship with Zuma’s former financial adviser and convicted fraud, Schabir Shaik.

Thales also contended it was unaware that Shaik was financing Zuma’s lifestyle via a corrupt “retainer”. 

The company secured a R2.6-billion contract as part of the German Frigate Consortium to provide combat suites for the South African Navy’s four Meko class frigates as part of the 1999 Strategic Defence Procurement Package, known as the Arms Deal. 

Intertwined into this deal were several politically connected black economic empowerment partners such as Shaik and his company, Nkobi Holdings. 

Arguing for Thales, Barry Roux SC tried to create as much distance as possible between his client and the embattled former head of state.

Roux said Thales’ submissions filed with the court showed that there was no evidence that connected Thales to a racketeering charge along with Zuma. 

In the criminal case both are facing, Thales (accused two) is alleged to have paid off Zuma, via Shaik, for political support in securing the deal and protection from investigation and prosecution. 

Accused number one Zuma is charged with benefiting from 783 payments from Shaik, who in turn received some, if not all, of the money from Thales. 

“We say in our submissions, there was no such evidence. We are saying if you look at the state and prosecutor’s approach, why is it they also charge Thales with the [Zuma] racketeering?” Roux told the full bench. 

He said the money paid to Shaik and his companies was “[Thales’] own money” and not “the proceeds of crime”. 

“Why does the state want to charge Thales with Zuma when they do not know anything about these payments? Shaik conducted that enterprise which engaged in a pattern of racketeering activities. From 1995 to March 2000 there is no evidence that Thales was aware of these payments [to Zuma] let alone that it participated,” said Roux.

He said the court was “obliged to intervene, as the prosecution will be irrational and arbitrary”.

The NDPP would not have charged the company for racketeering activities if it had “objectively” considered the available facts before it, he said. The NDPP had relied on “mere allegations by the prosecution without knowing if the allegations were supported by available evidence”. 

“This reduced the functions of the NDPPs to a rubber stamp exercise in breach of the principle of legality, leading to the unfair and irrational prosecution of Thales South Africa on racketeering”. 

Besides the current NDPP Shamila Batohi being cited as a respondent, Thales also cited former NDPPs Mokotedi Mpshe SC — who dropped all charges against Zuma in 2009 just months away from a national election — and Shaun Abrahams. 

Abrahams was forced to reinstate the charges after the Democratic Alliance in April 2016 obtained a landmark judgment in the North Gauteng High Court, upheld by the Supreme Court of Appeal a year later, that found Mpshe’s withdrawal of the charges was irrational and should be set aside. 

Roux said there was no evidence that identified Thales as being aware of any payments made by Shaik or his companies to Zuma and therefore the company being incriminated via common purpose.

This is not the first attempt by Thales to escape prosecution. In July 2018 the National Prosecuting Authority turned down representations by Thales not to be charged while in May 2020 the Constitutional Court dismissed Thales’ direct appeal to the highest court to have the charges permanently set aside.

Key to the argument presented by Roux is a 2007 Prosecution Memorandum sent to the NDPP’s office where the state conceded that the allegations against Thales “remains one of the weakest aspects of this case, as it relies predominantly [on] inferences rather than direct evidence, and is accordingly vulnerable to… criticism”. 

Roux said there was no evidence that identified Thales as being aware of any payments made by Shaik or his companies to Zuma and therefore the company being incriminated via common purpose.

“The fact that the prosecution remains incapable of providing the factual basis for this particular racketeering charge confirms that there is no, and there could never have been, any evidence supporting these allegations.” 

If Roux’s argument is successful, it will leave Zuma as the last man standing accused of accepting bribes totalling more than R4-million — a paltry sum in the wake of the allegations made against Zuma lieutenants before the State Capture commission.

But as detailed in the state’s heads of argument, it is not the state’s case that Thales was aware of every payment by Shaik to Zuma, but that by at least 1998 the state knew Zuma was being paid off by Shaik: 

“The evidence… supports a defensible inference that by 1998, at the latest, the Thales group officials controlling Thales SA were aware that Mr Shaik and Nkobi [Holdings] had Mr Zuma on a ‘retainer’ in exchange for which Mr Zuma had used and would use his influence and political connectedness to benefit them and their business associates (like the Thales group), and that the Thales group officials not only went along with the situation but actively sought Mr Zuma’s assurance that its association with Mr Shaik and Nkobi would inure to the benefit of the Thales group in its business dealings in South Africa, in particular, its then intended participation in the arms deal as the supplier of the combat suite for the corvettes.” 

Arguing for the state, Wim Trengove SC said Thales agreed to pay Zuma so that he would protect the company. 

“Not only did they conspire to conceal past bribes, but they joined in future bribes. They knew Shaik was bribing Zuma. 

“[The State is] saying that the agreement to pay a bribe is an offence and… it was a separate agreement that led to the concealing of that payment, which is money laundering. That money was dressed up as a legitimate service fee,” said Trengove.

The state maintains it has “strong evidence” that between October 1999 and March 2000 the Thales group and Shaik “actively involved Zuma in “the planning of an illegal agreement” in which Zuma would receive “an annual payment of R500,000 from the arms company”.

This payment, said the state, was to remain in place until Nkobi Holdings started receiving dividends for its role in the arms deal and that “Mr Zuma would protect the Thales group against the then ongoing investigation into corruption with the arms deal and also permanently promote its interests”.

In the state’s heads of argument, it cited one particular item where it claims Thales must have been aware of the illegal relationship between Shaik and Zuma. 

“In February 2001 the Thales group paid about R250,000 to Kobitech (Pty) Ltd (an Nkobi group company), which then on-paid R250,000 to one of Mr Zuma’s creditors, namely Development Africa. This is one of the 783 payments listed in the schedule to the indictment.” 

Judgment has been reserved. DM