Axed Armscor boss accused over R95m loss

In a new twist to the axing of Armscor boss Sipho Thomo, the Mail & Guardian understands that Thomo was alleged to have negotiated, without authority, the dropping of a $12,55-million (R95-million) penalty due from helicopter supplier AgustaWestland.

It is understood that the penalty was incurred because of the late delivery of the A109 helicopters that formed part of the government’s controversial arms deal acquisition.

According to a disciplinary charge sheet amendment seen by the M&G, Thomo was alleged “without authority and knowledge of the board” to have negotiated a revision of the penalty with Agusta.

Other disciplinary charges included:

  • That Thomo provided an “inaccurate and misleading figure” when he told a parliamentary defence committee briefing on October 14 last year that delays in the Airbus A400M programme drove up the price to an estimated R47-billion. This was attacked as wildly exaggerated by Airbus and the defence ministry (latest estimate—about R25-billion for eight aircraft), but Thomo’s disclosure seemed to galvanise government into cancelling the order.
  • The disciplinary charge sheet alleged that the misleading price tag had “serious legal and reputational repercussions for Armscor and the department of defence”.

  • Thomo failed to inform the Armscor board about the October 14 briefing, resulting in none of the members of the board attending—much to the committee’s irritation.

  • Thomo was guilty of other “disgraceful and unbecoming” conduct and “dereliction of duties”.
  • Thomo was charged at a disciplinary hearing conducted personally by Armscor chairperson Popo Molefe on December 14 and 15 in front of an independent tribunal chaired by advocate Nazier Cassim.

    According to a statement by Molefe, the board accepted Cassim’s recommendation and Thomo’s employment was terminated from January 7.

    Attempts to reach Thomo failed, but he resisted Molefe’s call for him to resign—claiming he had done nothing wrong—and is expected to challenge his dismissal.

    It is unclear why Thomo attacked the A400M project. He is known to have opposed it from the start, but some observers at the committee briefing believe he was facing questions about his own business ­interests and his salary and grasped the A400M controversy as a means of deflecting attention.

    The allegation about Agusta­Westland may also throw light on the sudden resignation of Denel Saab Aerostructures (DSA) chief executive Lana Kinley on January 11.

    It is understood that Kinley and her financial officer resigned when the DSA board rejected a new contract she was proposing.

    The contract would have given DSA much-needed cash flow to fill the gap created by the A400M delays. DSA remains a significant subcontractor to Airbus, despite the government’s cancellation of its own order.

    A defence industry source said the contract was rumoured to be with Agusta, which had proposed subcontracting DSA in relation to another helicopter contract elsewhere in Africa. However, the deal would be contingent on Agusta being relieved of outstanding arms deal offset obligations.

    DSA—which is majority state-owned—is to hold a board meeting on Friday to discuss the ­resignations.

    Sam Sole
    Stefaans Brümmer

    Stefaans Brümmer

    Stefaans is an old hand at investigations. A politics and journalism graduate, he cut his reporting teeth at the Cape Argus in the tumultuous early 1990s; then joined the Mail & Guardian as democracy dawned in April 1994. For the next 16 years (a late-1990s diversion into television and freelancing apart), the M&G was his journalistic home and launch pad for award-winning investigations focusing on the nexus between politics and money. Stefaans has co-authored exposés including Oilgate, the Selebi affair, Chancellor House and significant breaks in the arms deal scandal. Stefaans and Sam Sole co-founded amaBhungane in 2010. He divides his time between the demands of media bureaucracy (which he detests), coaching members of the amaBhungane team, and his first love, digging for dung.
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