NPA progresses with arms enquiry


The National Prosecuting Authority (NPA) says its joint investigation with the British Serious Fraud Office into suspicious payments made by BAe, a predecessor of BAE Systems, is progressing “satisfactorily”.

The NPA in a progress report to Parliament`s watchdog Standing Committee on Public Accounts, tabled this week, says it has investigated a “wide field of suspected offences” over the last eight years arising out of the report of the Joint Investigation Team that probed the R47 billion 1999 strategic defence package (SDP).
The SDP sought to rearm the South African Air Force and SA Navy that by the end of apartheid in 1994 operated a fleet of obsolete, obsolescent and antiquated aircraft and ships.
The programme, headed by then-deputy president Thabo Mbeki set out to acquire 50 fighter aircraft, 30 helicopters, four frigates and three submarines from various western European vendors.
The frigates and submarines have all since been delivered and commissioned as have 24 BAE Systems Hawk Mk120 lead-in fighter trainers, five Saab Gripen advanced light fighters and the majority of the 30 AgustaWestland A109 light utility helicopters. In addition, four AgustaWestland SuperLynx 300 maritime helicopters were ordered and delivered for deployment aboard the ThyssenKrupp Marine Systems (TKMS) Meko A200SAN frigates.                  
The report says five aspects of the SDP have so far been probed after “evidence was found to warrant further investigation.”
Fighter foibles
Other than allegations of suspicious payments made to various parties by BAe, the NPA has also probed allegations regarding the choice of frigate combat suite; the selection of the Meko frigates themselves; the provision of vehicles at a discount to some Members of Parliament, government officials as well as defence industry figures; and, the private interest late defence minister Joe Modise and “certain other officials involved in the arms acquisition process” held in Conlog, a “company which benefitted from arms deal contracts.”
Briefing MPs on the BAe probe, the NPA said by February 2008 there was “sufficient suspicion of the commission of offences of at least corruption and money laundering to declare a full investigation”.
The prosecuting body added that since the investigation is ongoing, it is still too “early to say whether there are persons who are suspects. It is also not appropriate to provide details of the persons who may be of interest to the investigation.”
The NPA says the allegations “in a nutshell” regarding the fighter acquisition projects are that BAe “paid huge commissions to its agents both in SA and elsewhere to assist securing the … contracts. A large portion of these commissions was paid through a series of overseas registered entities in a manner designed to obscure the origin and reasons for the payments. BAe was unable to provide the SFO with satisfactory details of the work done in return for these huge payments.”
The Mail & Guardian in March last year reported the SFO had put the figure at R1 billion at then-current exchange rates for the Hawk and Gripen contracts worth a combined R27 billion.  
As a consequence of the investigation searches “were conducted on a number of premises on 26 November 2008.” Premises raided were those of BAE Systems as well as the homes and offices of Fana Hlongwane, an advisor to Modise at the time the SDP was concluded, as well as the home of controversial businessman Johan Bredenkamp. Hlongwane is currently chairman of the Ngwane Defence Group and its Illovo, Johannesburg, offices were also raided.  
Frigates at sea
Regarding the frigate combat suites the NPA noted that its investigation has already led to several prosecutions, including those pending against president-presumptive Jacob Zuma and two Thales subsidiaries Thales International (Thint) Holdings (Southern Africa) Pty Ltd and Thint (Pty) Ltd. The NPA has also secured the conviction of Zuma`s “financial advisor” and Thales black empowerment partner Schabir Shaik and several of his companies. Shaik is currently serving a 15 year prison sentence for fraud and corruption.
Shaik`s brother, Shamin, also known as “Chippy”, was chief of defence acquisitions at the time the SDP was contracted.       
The NPA says it has been following news reports regarding a German investigation that “had uncovered records of a meeting at which a certain DoD official is alleged to have demanded a bribe of US$3 million from a Thyssen executive, which was then subsequently paid into the account of an offshore company set up for this purpose.
“Although the name of the official is mentioned in the article, it is not deemed appropriate to name him only on the strength of media reports”.
The Sowetan newspaper identifies this official as Shamin Shaik. 
The prosecutors also hinted at obstruction at the Department of Justice (DoJ), saying they were aware that their German peers had directed a request for mutual legal assistance there but that this had “been returned unexecuted with certain queries”. The NPA, noting that the Germans were investigating conduct that “fell squarely” within the scope of their own investigation have asked the DoJ to provide them a copy of the request “but this has not been received to date.”
The prosecuting authority says if the requested information is not forthcoming from the DoJ, it will it will approach the Germans for assistance. The report does not set a date for doing so.        
The Sowetan adds that in August last year, then-public enterprises minister Alec Erwin told a media briefing that “the German prosecutors are not prosecuting anybody. They`ve stopped the investigation. They believe there`s no basis whatsoever for the investigation”.
Director-general of the Department of Justice Menzi Simelane also claimed that “the German authorities are not pursuing that investigation any further”.
Conlog and DASA
The probe into Modise and Conlog, the report notes “little progress … although it has not formally been closed.” The investigation into the vehicle discounts is now “complete.” The report notes the conviction of former African National Congress Parliamentary chief whip Tony Yengeni for fraud and adds that charges of corruption against him were withdrawn. “A decision was taken not to prosecute certain other persons suspected of receiving such discounts due to insufficient evidence”.