Pretoria (Reuters) - Officials probing the government's controversial arms deal said on Thursday that they are investigating at least 24 individuals and 68 statutory bodies in connection with allegations of fraud and corruption. 

"This may well end up in court . . . At this stage, it seems to us that there might very well be some criminal prosecutions," National Director of Public Prosecutions Bulelani Ngcuka told editors at a briefing. 

Pressed to say whether the possibility of prosecutions meant the award process was flawed, Ngcuka said: "At this stage, we are not in a position to say all is not well." 

Ngcuka, Auditor General Shauket Fakie and Public Protector Selby Baqwa are heading an inquiry into the award of a R43 billion arms contract to companies in Britain, Germany, Italy, Sweden, France and South Africa. 

Fakie said 30 full-time staff helped by outside auditors are probing allegations of conflict of interest, bribery and process violations in the purchase of ships, submarines, helicopters and fighters. 

Ngcuka said investigators have seized bank and other records of 68 statutory bodies and 24 individuals under investigation in connection with the deal, but that it is too soon to say whether any crime had been committed. 

Gifts, Contracts 

Fakie said a critical issue is to establish a link between gifts received and the allocation of contracts, adding that investigators hoped to publish a substantive report by the end of July. He said criminal corruption and unethical behaviour would be covered in the report. 

Fakie said investigators had started looking into the controversial acquisition of a luxury car by the parliamentary head of the African National Congress, Tony Yengeni, weeks before the issue was raised in the media. 

Proposing that investigators and editors should reach agreement on some form of self-regulation, he said publicity around the Yengeni case had undermined the investigation. "What we saw was that after publication of that story, some of the people (witnesses) refused to cooperate," he said. 

Editors rejected the proposed accord, including a request to share information with investigators, and declined a private briefing on unpublishable aspects of the enquiry. 

"I am concerned that they tried to reach a compact with the media . . . to get the media to be informers," SA National Editors Forum media freedom co-ordinator Ray Louw told Reuters later. He said editors understood the challenge of conducting an investigation in a free society, but added: "This is the risk that all investigators run all over the world." 

Louw said he was encouraged by the way the proposal was discussed and amicably dismissed. 

With acknowledgment to Reuters and Woza.