The bad publicity surrounding DaimlerChrysler and its associates' penchant for handing out posh vehicles for free or vast discounts to influential SA politicians, soldiers and businessmen seems finally to be embarrassing the parent company in Stuttgart, and the German government.

The German embassy is "very concerned" about the developments. Daimler-Chrysler Stuttgart says it is awaiting the outcome of the official SA investigation. A spokesman says it has an "integrity code" which outlaws bribery. It is especially concerned because DaimlerChrysler CE Jurgen Schrempp is a member of the President's International Advisory Council on good governance.

Though the media spotlight tends to focus on those who are bribed, there is a growing trend to hold the bribers equally culpable. Germany recently passed a law against bribery of foreign officials.

Bribery has yet to be proven in SA's R43bn-R50bn arms deal. But an awful lot of shiny new Mercs have been turning up in officials' parking lots.

DaimlerChrysler says the cars came through European Aeronautic Defence & Space (EADS), of which it is a shareholder. EADS headquarters in Munich says it has completed an internal investigation but is waiting to release the results. EADS SA MD Michael Woerfel could not be reached for comment.

EADS admitted in April that it had provided discounted cars to 30 SA VIPs. Four have been named. ANC parliamentary chief whip Tony Yengeni was the first to be identified.

The Sunday Times reported this week that Defence Force chief Siphiwe Nyanda also received a heavily discounted Merc, as did two officials responsible for negotiating the counter-trade deals for the arms. They are said to be former Armscor CE Llew Swan and Trade & Industry (DTI) counter-trade chief negotiator Vanan Pillay.

DaimlerChrysler spokesman Lulama Chakela says the incidents have forced a re-examination of practices relating to discounting, staff purchases and sales from the fleet.

Meanwhile, Pillay has been moved from his high-profile position at DTI. Spokesman Edwin Smith says there is "absolutely no connection" between the discounted car and Pillay's "lateral" move to a new directorate this month - a pity, it would be a rare case of government action over conflict of interest.

With acknowledgement to Ferial Haffajee and Financial Mail.