Mungo Soggot and Barry Streek
The Department of Defence’s chief of acquisitions, Chippy Shaik, has been blasted by the arms deal probe for his notorious conflict of interest and for possibly favouring his brother’s company over a more eligible bidder.
Presenting the report to Parliament on Thursday, National Director of Public Prosecutions Bulelani Ngcuka signalled that his Scorpions unit is poised to deal with Shaik.
“The area of conflict of interests of government officials is cause for concern and viewed as extremely serious,” he said, adding, “We will be taking action in the next 24 hours.”
Asked later to elaborate on who or how many people would be targeted, Ngcuka said “my lips are sealed. Let’s wait until tomorrow [Friday].”
Shaik is attacked in the report for not recusing himself from meetings where systems for the navy’s corvettes were discussed. The winning company was Thompson CSF Detexis, whose local shareholders include a company belonging to Shaik’s brother, Schabir.
Shaik has consistently shrugged off allegations of conflict of interest many made in the Mail & Guardian by saying he recused himself.
Detexis is owned by France’s Thompson CSF, whose South African operation has as a shareholder Schabir Shaik’s Nkobi Holdings.
Shaik is the only senior official to take a direct hit in the arms report, which could generate suspicion that he has been lined up as a scapegoat. The Shaik family has impressive African National Congress credentials his brother, Mo, was a leading light in ANC intelligence and is now South African ambassador to Algeria.
The arms investigators nevertheless put together a convincing case against Shaik, concluding: “Mr Shaik, in his capacity as Chief of Acquisitions, declared his conflict of interest in December, but continued to participate in the process that led ultimately to the awarding of contracts to the said companies.”
To award Thompson CSF Detexis the contract, Shaik and his colleagues passed over Cape-based company C2I2, owned by Richard Young, a businessman who has led the charge against the handling of the arms deal. The report raises the possibility that Shaik swung the decision for his brother: “The regularity or not of the decision to select the IMS of C2I2, may also have been affected by the position of Mr Shaik.”
The report says that at the first relevant meeting it was recorded that Shaik had recused himself. The report also refers to a letter written in October last year by the chief of the navy, Vice-Admiral RC Simpson-Anderson, stating that the agreement was that he would replace Shaik as chairperson at meetings where the systems were discussed.
But the investigators observed that at a meeting in March 1999 Shaik joined in discussions about the equipment.
“His taking part in discussions is contrary to what Vice-Admiral Simpson-Anderson stated in this regard.”
The report concludes: “It is clear that Mr Shaik’s ‘recusal’ was no recusal at all.”
The report found that Shaik did not get the military security clearances required by law for his position.