At the time this article went to press, Dr Voloshin could not be contacted. As a result certain allegations were made that were factually incorrect and had not been substantiated. The M&G recognises the article was defamatory and apologises to Dr Voloshin and Marvol for the inconvenience caused by the publication of this article and for any damages they may have suffered as a result.
An arms dealing scandal in Russia looks set to upset the international weapons trading career of Joe Modise, the former minister of defence at the centre of the controversial R43,8-billion arms procurement deal.
Modise, along with deceased former minister of foreign affairs Alfred Nzo, is listed as a director of Marvol Management (SA) by the Registrar of Companies in Pretoria. His business partner in Marvol is a controversial former Russian citizen with close links to the former KGB.
The Russian, Dr Mark Voloshin, launched his lucrative arms dealing career at the height of apartheid by illegally arming the apartheid state and, in the process, fleecing the Russian government of roughly $80-million.
Together, the directors of Marvol plan to sell jet fighter upgrades the technology for which was originally stolen from Russia by Voloshin. But industry insiders have told the Mail & Guardian that Voloshin's involvement may well scare off many potential buyers.
Details of the Russian's shady past are only now emerging in Russia. In South Africa he has led the high life for years and entertains senior politicians on a regular basis. He has also donated millions of rands worth of Russian art to local museums. One particularly lavish gift was a Faberg egg given to former president Nelson Mandela.
But in the late 1980s Voloshin was involved in a scheme that, according to Russian media reports, "defies belief". He was illegally smuggling with the approval of the Russian government top-secret Russian military equipment into South Africa.
This equipment took the form of highly sensitive jet engines for the MiG 29 fighter aircraft as well as state-of-the-art Russian missile technology.
The transfer was kept secret in Russia and was only revealed in October last year when the newspaper Novaya Gazeta printed details of the scandal. The newspaper broke the story after being leaked top-secret Kremlin documents that showed former Russian president Boris Yeltsin was aware of the highly illegal deal that gave the apartheid regime the air superiority it desperately needed.
Yeltsin is quoted in the papers as saying Russia should "work energetically, but carefully, considering the development of the internal situation in South Africa and the [United Nations] sanctions. Not to give an opportunity for us to be accused of violating the sanctions."
At the time a full arms embargo was in place against South Africa in terms of UN resolution 418. Russia was one of the most enthusiastic supporters of this embargo and was indeed the driving force behind isolating Pretoria.
In South Africa, however, Armscor — the recipients of the technology did not keep quiet but leaked the news that they had successfully upgraded the former South African Defence Force's (SADF) Mirage planes by installing Russian engines and anti-aircraft missiles but they did not mention where the technology came from.
According to a former Armscor employee, the decision to leak this information was consciously taken at a time when the SADF was deeply concerned that modern MiG29 aircraft, which were on order by Zimbabwe, would give the frontline states the confidence to strike back should the South African Air Force (SAAF)launch "pre-emptive strikes" into their countries.
The project was shelved some time in the mid-Nineties after an unknown number of aircraft had been upgraded at the expense of the Russian state and to the advantage of Voloshin. According to the Novaya Gazeta report, the engines and missiles were sent to South Africa for "technical experiments", not to be kept by the SAAF or Armscor.
As the Russian government could not deal with South Africa, or Armscor, the equipment was given to Marvol Management Limited, which had an office in Germany. The owner of this firm was Voloshin, who had organised the entire deal through his contacts in the KGB. He was used as a middleman to hide any links between the Russian government and Armscor.
From his German offices, the goods then worth $80-million were shipped to South Africa. Voloshin followed soon after. No payment was ever made for the engines and equipment, nor was it returned as it was supposed to be. The Russian state was fleeced out of $80-million while Voloshin became an instant millionaire when he pocketed the fees Armscor paid him.
Almost immediately Voloshin took out South African citizenship and set himself up in Cape Town. He bought a palatial wine farm in the Cape and also acquired what was for many years the only five-star hotel in Pretoria, the Marvol Manor House.
The property, originally called Vergelegen, was previously owned by Armscor and used for entertaining guests of the corporation. Voloshin obtained it from the company in 1992, in the middle of the programme to upgrade the Mirages. After living in it for a short while he converted the mansion into a luxury hotel.
The details of Voloshin's role in secretly arming the apartheid regime most recently brought damning criticism by Russian sociologist Boris Kagalitsky, who labelled Voloshin "a thief" in a damning editorial in the Moscow Times.
Kagalitsky has compared the Voloshin scandal to the Contragate affair in the United States, where Colonel Oliver North was sentenced to 1 200 hours community service for illegally and covertly arming both Iran and the Contra guerrilla movement in El Salvador.
Kagalitsky writes of the deal: "What followed was understandable. In trying to keep the matter quiet, the government had to entrust the deal to a shady middleman, who then got the better of inexperienced Muscovite bureaucrats. This story is only coming to light after all the main players have retired.
Yeltsin has full amnesty for past actions. And the new president answers only for the period he has held office since the March election. In a similar circumstance in the US, articles about secret deals between the US and Iran became a huge political scandal, causing people to mistrust both Ronald Reagan and the entire Republican administration."
Last year the scheme to upgrade Mirages, which was pioneered with stolen and illegally obtained technology, was declared operational again by Armscor marketing boss Ken Jones. With Armscor, Modise and other partners, Voloshin is marketing an upgrading programme for Mirage jets to foreign countries. The scheme has already interested one potential customer.
The M&G has established that Promexport the official Russian arms exporter would be supplying the components built by MiG. Armscor would be completing the necessary alterations and servicing the equipment once completed.
Marvol appears to be acting as middleman again, though for no apparent reason this time.
According to information obtained by the Moscow Times, officials of the MiG aircraft corporation flew to South Africa last year to discuss the finer details of the plan to offer the Mirage upgrades. This was not reported in the local media.
The deal is potentially worth millions of US dollars to Modise as many African and South American nations still operate the now-ageing Mirage jets. The conversion costs less than one-third the cost of a new aircraft.
MiG representative Sergei Somatov has confirmed that two engines have already been shipped to South Africa for fitting into a Mirage. Armscor representative Bertus Celliers said that while the project was operational, none of the original Cheetah aircraft the warbirds of the apartheid era are for sale as they are still in use. He also said that a number of former SAAF Mirage jets are currently for sale and that, if the customers desired, they could be fitted with upgraded Russian engines and avionics.
Meanwhile, the M&G has established that in addition to fleecing the Russian government, Voloshin has been under investigation while in this country. A probe was apparently ordered into his alleged involvement in organised crime in the Western Cape more than six months ago. This was completed and a dosier on Voloshin was handed to Western Cape police intelligence commander Director Attie Trollip.
The M&G has not been able to establish the exact contents of the dossier. Trollip is currently on leave and not available for comment. Voloshin could not be contacted. A Marvol official said he was in Germany and unreachable. Modise failed to respond to numerous attempts to contact him for comment.
Meanwhile, in a separate development, Pan Africanist Congress MP Patricia de Lille has told the M&G she is seriously considering approaching a stockbroker to buy her shares in the companies that have successfully tendered for contracts in South Africa's R43,8-billion defence procurement Bill. She claims this is one of the options she may exercise should the special investigating unit of Judge Willem Heath not be included in the probe into alleged corruption in the deal. Said De Lille: "Being a shareholder will allow me access to the other shareholders and the right to attend meetings and so on. In that way I will be able to expose the corruption that has gone on." De Lille says she is also thinking of approaching Transparency International, the UN and the European Parliament with her potentially damning information on corruption in the R40-billion arms deal should Heath's probe be blocked.
