New arms deal allegations surface

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Saab and BAE paid over a billion rand in commission to agents to secure the sale of 26 Gripen fighter jets to South Africa, the Swedish newspaper Expressen has reported, citing documents obtained by the UK’s Serious Fraud Office (SFO).

According to the tabloid, BAE documents handed to the SFO in 2007 show that money was paid to agents believed to be involved in bribery, with 7.25% of the Gripen and Hawk sales’ value (13 billion kronor or $1.58 billion) possibly paid out to agents.

At the time the 26 Gripens and 24 Hawks were sold to South Africa in 1999, the deals were arranged by Gripen International, a joint venture between Saab and British Aerospace. Gripen International was subsequently dissolved, with Saab marketing the Gripen on its own.

The Expressen on Thursday also suggested that Allan MacDonald, BAE’s former head of marketing for South Africa and Asia, kept Saab informed about the payments. Saab has in the past denied any wrongdoing, saying BAE negotiated with agents in South Africa. MacDonald apparently said Saab paid BAE extra to take responsibility for the commission payments.

Saab’s press officer Sebastian Carlsson told defenceWeb that Saab has investigated the matter internally, with Swedish attorneys and with South African authorities and discovered no actions in the deal that were against the law. He said it was normal for companies to hire lawyers and advisors, especially when operating in foreign markets, and that he was confident Saab’s advisors followed the law. Carlsson emphasised that there is a difference between commissions and bribes and that in South Africa commissions were paid.

Apparently R154 million of the R1.5 billion in commission was paid to Fana Hlongwane, adviser to late defence minister Joe Modise. According to Expressen, R2 million was paid to Hlongwane in October 1999 via the company Red Diamond. The money then travelled via a Swiss agent into Hlongwane’s company Westunity.

In February this year the HSBC leak, according to Swedish Radio news programme Ekot, found 100 million kronor ($12 000) in three Swiss bank accounts belonging to Hlongwane. The programme reported that the money was related to the sale of Gripens to South Africa.



Arms deal critic Terry Crawford-Browne last week said the revelations follow Swedish TV4’s expose in 2012 that the present prime minister Stefan Löfven (whilst then a trade union official) had facilitated the laundering of additional BAE/Saab bribes of R30-R35 million to ANC politicians ahead of the 1999 elections.
“The Scorpions in 2008 seized 460 boxes and 4.7 million computer pages of evidence against BAE. That massive volume of evidence was the very cause of the Seriti Commission’s creation by President Jacob Zuma in 2011. The Commission however, deliberately failed to investigate that evidence which, reportedly, it has left lying in two shipping containers at the Hawks premises in Pretoria…That the Seriti Commission has been a farce and a gross waste of time and public resources is yet again confirmed by the Swedish disclosures,” Crawford-Browne said.