Shaik arms-deal link deepens

The brother of a senior official guiding South Africa’s controversial R43-billion arms package has been a director of a local offshoot of one of the winning foreign companies from as early as 1996.

Shabir Shaik, the brother of Shamin “Chippy” Shaik, the defence secretariat’s chief of acquisition, was registered as a director of Thomson CSF in 1996. Thomson CSF, a French military company, is one of the groups that was selected last year to supply equipment for the South African navy’s corvettes. Thomson’s contracts are estimated to be worth at least R400-million.

In May last year, the Mail & Guardian published details of Shabir Shaik’s directorship of another company involved in the arms deal, African Defence Systems (ADS), which was appointed by the defence secretariat to coordinate the acquisition of the corvettes and to integrate the ships’ equipment.

At the time, a search of the company registry did not reveal any link between Shaik and Thomson, which now owns ADS. However, a new company search system this week showed Shaik’s directorships of two Thomson CSF entities, along with about 20 other companies.

Possible nepotism involving Chippy Shaik and members of his family is one of several aspects of the arms deal that are expected to be probed by various state institutions, including the National Directorate of Public Prosecutions and the Public Protector.

The Heath special investigative unit, which the standing committee on public accounts also wants to examine the deal, is awaiting a proclamation from the Ministry of Justice. There is speculation that the government could deny the proclamation and instead form a new investigative unit or a commission of inquiry to probe the arms deal.

Gavin Woods, chair of the public accounts committee, said this week he was unaware of Shaik’s directorship of Thomson stretching back to 1996, adding that “questions raised by these sorts of facts stress the need for a rigorous investigation [of the deal].”

The fact that Shabir Shaik is a director of Thomson and has been for so long will likely intensify the investigators’ focus on the Shaiks. Shabir Shaik became a director of Thomson CSF on July 16 1996 and of Thomson-CSF Holding (Southern Africa) on May 21 1996. He became a director of ADS after Thomson bought ADS, which was previously known as Altech Defence Systems, from Altech.

Chippy Shaik has defended allegations of a conflict of interest where ADS is concerned on the grounds that he recused himself from all decisions on South African involvement in the weapons deals. He told the M&G last May that the committees concerned had been chaired by the chief of staff of the air force and navy.

Commenting this week on his brother’s directorship of Thomson CSF, Chippy Shaik reiterated that he had recused himself before his brother became a director of ADS in 1999. He said he should have been praised for having voluntarily stepped down: “I should be applauded and not hung.” He said that when his brother became a director of Thomson’s South African operation, the company was not involved in any military business, but became so only after it bought ADS from Altech in two stages, in 1998 and 1999.

Shaik said Thomson had lost out on many other bids for the defence package. Shaik said it was “not a crime to have family in defence”. He said there had merely been a “perceived bias” with ADS because of his relationship with his brother, and that he had taken care of that with his recusal. Shabir Shaik could not be reached before going to press.

The company registry’s records show that Shabir Shaik is registered under three different first names — Scabir, Schabir and Shaik. His directorship of Thomson is recorded under Schabir Shaik. When Chippy Shaik was questioned by Parliament’s public accounts committee in October last year, he referred to his brother’s directorship of ADS but not to that of Thomson.

Chippy Shaik said this week that he had not been given the opportunity to do so by the public accounts committee, but that he had come to the meeting willing to divulge all information about his brother’s involvement with Thomson.

According to a transcript of the gathering, Shaik said: “I had a conflict of interest with ADS as a family member became a director this year in ADS and I have declared that conflict of interest.” After further questioning, Shaik told the committee: “With regard to the corvette programme, that is the only area I reiterate that I have a conflict of interest.”

There have been other allegations of nepotism involving Chippy Shaik. His wife Zarina is employed by ADS as a marketing assistant. Chippy Shaik says she has worked there for about 20 years, and currently does so on a part-time basis.

Chippy Shaik was appointed chief of acquisition in July 1997. He was previously in the Department of Defence’s policy division. Shaik said he was happy to go court and was already armed with legal opinions to fight any allegations relating to conflicts of interest.

Shaik said ADS had been built up by Armscor over a period of about 20 years to provide equipment for the navy, and that it had not “popped up” merely because his brother was involved.

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Mungo Soggot
Guest Author

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