Evidence of ANC arms deal link

A company with links to the African National Congress has emerged as a key beneficiary of the R43-billion arms deal. The company, Nkobi Holdings, which is named after the late Thomas Nkobi, former treasurer general of the ANC, is a shareholder in Thomson CSF, a company that will be providing systems for the navy’s new corvettes — one of the most controversial parts of the arms package.

The man behind Nkobi Holdings, Shabir Shaik, this week confirmed that Nkobi was a shareholder in Thomson CSF’s South African arm. Shabir Shaik also confirmed his connections to the ANC and that he had once served as Deputy President Jacob Zuma’s financial adviser.

When asked whether he or Nkobi Holdings had donated money to the ANC, Shaik said that was ”not a fair question”. Asked whether he was denying having given money to the ruling party, he said: ”No, I am not denying it. ”For many years I was [Zuma’s] financial adviser. I helped him when he held the post of minister of tourism in KwaZulu-Natal. I travelled with him abroad as I did with [former transport minister] Mac Maharaj and President [Thabo] Mbeki. But that does not mean anything,” he said.

As the Mail & Guardian reported last week, Shabir Shaik has been a director of Thomson CSF’s Southern African arm since 1996. An insider from Nkobi Holdings this week went public about Shaik’s involvement in the formation of Thomson CSF Southern Africa. The insider, Professor Themba Sono, also told the M&G how Nkobi Holdings planned its bid for the corvettes contract in the arms package as early as 1996 — and about the way it claimed to use ANC contacts in general to bag government contracts.

Until now Shabir Shaik has featured in revelations about the arms deal because of his relationship to his brother, Shamin ”Chippy” Shaik, the defence secretariat’s head of procurement since July 1997. Chippy Shaik previously worked in the Department of Defence’s policy division. There he was involved in the defence review, the government’s blueprint for its weapons acquisition programme that is now the centre of the political storm involving the government’s handling of an investigation into the deal.

According to Sono, Shabir Shaik — and other representatives of Nkobi Holdings — attended meetings that resulted in the setting up of Thomson’s local arm. Sono says that from the beginning, Shabir Shaik discussed the corvettes, and how Nkobi/Thomson could provide electronic systems for them. Sono says that during meetings at which the corvettes were discussed, Shabir Shaik made it clear that Nkobi Holdings’ role was to provide political connections — as opposed to financial backing or technical expertise.

”Everybody understood that the political connection was so strong from Shabir’s side that there was no need for Nkobi to come up with the money. Shabir said words to the effect that without him and Nkobi none of them [other business partners] would get any contracts,” Sono says. Sono adds that throughout his stint at Nkobi — which stretched from April 1996 until January 1997 — Shabir Shaik was in regular contact with both Chippy Shaik and Mo Shaik, his other brother who was formerly in the intelligence service and who is now South Africa’s ambassador to Algeria.

Sono says Shabir Shaik would frequently call one of his brothers during business meetings. Sono said discussions on the corvettes also took place during meetings involving Nkobi Holdings, Thomson CSF representatives and senior employees of a subsidiary of Denel, the state arms company. These meetings resulted in the formation of Prodiba, a company that won the government’s tender for the new driver’s licence.

At one of these meetings, Sono recalls, a Denel representative explained that the name Prodiba was taken from ”Madiba”, Mandela’s clan name. While the Prodiba meetings involved key players from Thomson CSF, Nkobi and Denel, the company has not, until now, featured in the weapons deal.

Thomson CSF won its contract in the arms deal through a joint venture with African Defence Systems (ADS), a company that was appointed by the defence secretariat to coordinate the acquisition of the corvettes and to integrate the ships’ systems. Thomson CSF bought 80% of ADS from Altech, the South African technology group, in two stages in 1998 and 1999. Shabir Shaik is also a director of ADS.

Pierre Moynot, a Thomson CSF representative who has been party to all these talks since 1996, said this week one of the Nkobi group of companies had received a 30% stake in Thomson CSF’s South African operation. Moynot said that when, in 1998, CSF bought ADS, Nkobi’s shareholding in Thomson decreased to 25%. Moynot said ADS’s combat suite deal was worth R2,5-billion, adding that Nkobi Holdings had paid for its shares in these companies. This contradicts Sono’s account of meetings where Nkobi’s failure to provide equity had been accepted.

Chippy Shaik’s defence against any allegations of nepotism is that he recused himself as chair of the arms procurement committee when it considered the corvettes’ systems. As far as his role in the defence review is concerned, he said this week that he had merely formulated 129 different options for the defence force to consider, only some of which included the corvettes.

Chippy Shaik declined to discuss Nkobi Holdings this week on the grounds that he had nothing to do with it. He said he preferred to hold off replying on most of the questions put to him by the M&G because there was a possibility he would be involved in litigation from a Cape-based company, CCII, which has cried foul about losing out to ADS on the corvette contract.

Chippy Shaik skirted questions as to whether, after he recused himself, he had been present at meetings where the contract had been discussed. Chippy Shaik said key players involved in the process had confirmed in writing to the public accounts committee in the National Assembly that he had had nothing to do with the final selection of Thomson/ADS.

Last week, Chippy Shaik said Thomson CSF’s Southern African operation had not been involved in any military work until it bought ADS in 1999. This appears to contradict both Sono’s and Shabir Shaik’s account of Thomson’s business plans. Sono resigned from Nkobi in January 1997 after becoming wary of the way it operated.

He says he was introduced to Shabir Shaik in 1996 by a close friend, Dwight Triegaardt, a director of Nkobi. Sono says Triegaardt — who also later resigned from Nkobi — told him Nkobi had been dealing with Denel and that Nkobi felt it needed credible black Africans for its board. ”The name, Nkobi, made me think that this was an organisation closely attached to the ANC. I felt that they wanted to do business — everyone at that time was jumping to do business with the government. I understood that political dimension right from the beginning,” said Sono.

Although Sono was an appointed executive director, according to his business card, he was never reflected as such in the company registry. The shareholders in Nkobi Holdings are registered as management (25%), Education Trust Fund (10%), the Nkobi family (5%), South Africa Clothing Workers’ Union (through the Workers’ College) (10%), and Starcorp (50%). It is understood that Starcorp belongs to Shabir Shaik.

Sono says Shabir Shaik said bluntly on many occasions ”we bring the political goodwill. There has to be a tit-for-tat with these companies.” He says Shabir Shaik frequently dropped names of high-profile political figures. ”He talked of how he had travelled with Thomas Nkobi to raise funds.”

Sono continues: ”I went to Indonesia with Shabir in October 1996, replacing Zuma, who could not make it on the trip. Shabir kept the details from all of us. I felt there were other meetings involving Nkobi — the official board deliberations were insubstantial. I felt that we [the board] were just a think-tank to provide an operational framework for others. I had realised that this other ‘ghost board’ likely consisted of political heavyweights in KwaZulu-Natal.”

”As for the driver’s licence bid, we met quite a lot at Denel and at Thomson CSF. At one stage when we discussed what Nkobi should contribute to the joint venture, Shabir said we had the political clout and the political connections.”

Sono says that one stage during his stint at the company it emerged that Nkobi Holdings had funded a trip by King Goodwill Zwelithini to the United States. When questioned about why Nkobi Holdings needed to do this, Sono says Shabir Shaik replied that this was ”for the benefit of the movement [ANC]. I was led to believe that the reason for us paying was to help woo Zwelithini from Inkatha.”

Sono talks of how he lent Shabir Shaik R75 000 to pay staff — a sum for which Sono subsequently sued. ”He never paid me back, despite thanking me warmly for the loan and saying that even his brothers would not make such a kind gesture to him. I was partially repaid in November 2000 after we settled out of court.”

”As for the Nkobi name, Shabir said he had looked after the late Thomas Nkobi before he died. Shabir said Nkobi died in his [Shabir’s] house. He said he looked after the Nkobi family, and that Thomas had blessed the company, and that the company was supposed to honour him for the great work that he did.” It is understood the Nkobi family has objected to the use of its name in the company.

”During 1996 Shabir went to Malaysia at least twice. He also went to France at least three times. I was led to believe the trips to Malaysia were funding expeditions for the ANC. I was also under the impression foreign companies keen to invest in South Africa paid money to Nkobi — or tried to team up with it.”

According to noseweek, the investigative magazine, as early as 1990 Shabir Shaik went to Malaysia to raise funds for the ANC. He then became the adviser to Nkobi. The magazine says that when Nkobi died, Shabir Shaik used funds from Malaysia to establish a trust fund named after him.

Noseweek says that in 1995 Mandela’s lawyer, Ismail Ayob, told Malaysian prime minister Mahatir Mohamed that Shabir Shaik did not represent the ANC. ”But scarcely a year later Shabir was taken on an official visit to Malaysia by Zuma and also accompanied Jeff Radebe, Minister of Public Enterprises, on an official trip to Russia.” Sono also referred to these trips.

Sono says he spoke to the M&G in his personal capacity, and had not shared any of this information with the Democratic Alliance, for which he is a Gauteng MPL.

When interviewed this week, Shabir Shaik said: ”Go ahead and write what you want to write. Your newspaper has always done that. We fought evil and apartheid for 45 years. We can certainly fight the Mail & Guardian a few years more.” While admitting extensive links to leading lights in the ANC, Shabir Shaik denied he had won any contracts through these connections.

He said his high morals and belief in God prevent him from participating in any skulduggery. ”I believe in a God, after all. I became friendly with these people long before they held any positions of power.” Shaik claimed that his brother Chippy’s position in the Department of Defence made it even harder for him to obtain contracts.

Shaik admitted to the M&G that he had discussed the deal to supply corvettes to the South African navy with his brother as early as 1994. But, he pointed out, at that time Chippy did not hold a position with the Department of Defence and could not have had any input on the decision of whether to buy the corvettes. He also claimed his brother was not the only person involved in deciding where contracts are awarded.

”If I could rely on my brother sending anything my way that I wanted why do I only have a deal for R2,6-billion? My company only got one out of the 26 bids we applied for. ”Shaik admitted to having interacted with government during the deal, but claimed this interaction was not underhand.

”With the best business plan and the most capital you will still not succeed in business without business intelligence. I made appointments with government and visited them. I did not have any special access to information or people though.”

Additional reporting by Stefaans Brümmer, Nawaal Deane and Evidence wa ka Ngobeni