A top advocate was allegedly provided with a stolen firearm which he offered to return to an underworld figure for R20 000, it emerged in the Cape Town Magistrate's Court on Thursday.
Charl Kinnear, a police colonel investigating fights in Cape Town clubs, went on to testify that Brian Wainstein had paid the R20 000.
News24 reported in August that Wainstein, known as the international 'Steroid King', was shot dead in his Constantia home in August.
This incident, involving the firearm, happened several months before the shooting.
Kinnear made these shocking claims about the stolen firearm while testifying during the bail application of controversial businessman Nafiz Modack.
Modack, as well as Colin Booysen - who is the brother of suspected Sexy Boys gang leader Jerome "Donkie" Booysen - Jacques Cronje, Ashley Fields, and Carl Lakay, were applying for bail on Thursday.
They face extortion charges relating to the taking over of nightclub security.
Kinnear on Thursday testified that violence in clubs around Cape Town started intensifying following an auction in Parow in March.
He said controversial businessman Mark Lifman had been there.
"There was an altercation at the auction," Kinnear testified.
During the altercation, a man, Carl de Jager, was robbed of a firearm.
Kinnear said he was later informed the firearm turned up at the offices of Mihalik.
He said Mihalik contacted another controversial businessman, Andre Naude, who previously ran a nightclub security company with Lifman.
"[Mihalik] said that would give back the firearm to the lawful owner providing that a cash amount of R20 000 be paid," Kinnear said.
He went on to say that Wainstein had paid over the amount and the firearm was returned to De Jager.
Modack and his for co-accused were initially meant to have proceeded with a bail application on Wednesday, but the magistrate overseeing the matter had previously covered the application of another security company director linked to the underworld.
It was therefore found it would amount to a conflict of interest if he covered Modack's bail application and that of his co-accused.
On Wednesday, two others, Mathys Visser and James de Jager, who were arrested on December 15 - the same day Modack and his co-accused were granted bail in the court.
Both Visser and De Jager face a charge relating to firearms and both are involved in private security.
In a previous court matter, Visser was identified as being Modack's personal bodyguard.
Modack's bail application continues on Thursday.