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Ivor Powell Restrictions on the government’s investigations into alleged irregularities in South Africa’s R32-billion weapons deals could see senior government officials accused of nepotism and self-interest let off the hook. The latest probe in a series that have produced no visible results was mooted by Minister of Defence Mosiuoa Lekota after the release to Parliament last week of a damning report by Auditor General Shauket Fakie, which highlighted several “material deviations from generally accepted procurement practice” and called for a forensic audit of the process. But the government appears to be baulking at investigating alleged irregularities in the multibillion-rand weapons packages. This is in spite of reports that overseas bidders were informed that they would have to go into partnerships with companies linked to Department of Defence procurement chief Shamin “Chippy” Shaik as well as former defence minister Joe Modise if they wanted a slice of the armaments pie. Confirming that his department will be following up on irregularities highlighted by the auditor general, Lekota however insisted that his department’s probe would focus exclusively on issues raised at what the government calls the “prime contractor” level – deals signed between the South African government and governments representing overseas weapons suppliers. “As the government we signed contracts with other governments,” Lekota said. “We have no contracts with companies subcontracting to the prime contractors. That is something between the prime contractor and the subcontractor.
“If the Mail & Guardian contracts some company and that company employs another company which turns out to be crooked, that is not the responsibility of the Mail & Guardian.”
The auditor general’s report projects a different view. Bemoaning the limits placed on the scope of his own inquiry (by the proviso that the focus was on the prime contractors) Fakie expresses serious concern at “possible irregularities in contracts awarded to subcontractors”, and he goes on to recommend that “a forensic audit of or special investigation into these areas be initiated”. Laurie Nathan, executive director of the Centre for Conflict Resolution, echoed the auditor general’s disquiet. “If the auditor general raised concerns about subcontractors in the process and suggested that there could be a conflict of interests possibly involving senior officials in his department, then the minister is obliged to investigate those issues, whether or not they are part of the process directly overseen by government,” Nathan said. Two companies have been identified as standing at the centre of the controversy. One, African Defence Systems (ADS), was appointed by the defence secretariat as coordinator of the purchase of four Corvettes for the South African navy. Shaik’s brother Shabir is a director of ADS, which also employs Chippy Shaik’s wife.
This favoured position of ADS in terms of setting up the deals was allegedly used to exclude local technical supplier CCII – which had already been identified by the navy as preferred supplier of the Corvette Control System – from the deal, which subsequently went to a subsidiary of the French weapons manu-facturer Thomson, which also wholly owned ADS at the time. CCII managing director Richard Young -whose case is specifically noted in the auditor general’s report as demanding of a forensic audit – said he was taking legal advice on the possibility of suing for damages if the matter was not investigated further.
The other company in the spotlight is logistics outfit Futuristic Business Solutions – which recently acquired a substantial stake in ADS – where Modise’s former aide de camp, Lieutenant General Lambert Moloi, is a director. American helicopter giant Bell Helicopter claimed it was dropped from preferred-bidder status after failing to enter into partnership with Futuristic Business Solutions. The Heath special investigating unit has prepared documentation requesting the proclamation of its investigation into the weapons deals. The Heath probe had been put on hold pending the outcome of the auditor general’s investigations.