Michael Woerfel	Siphiwe Nyanda

·  Arms company head Michael Woerfel got a whopping discount on a Mercedes-Benz for military boss Siphiwe Nyanda

·  Men who helped tie up arms deal also got cut-price luxury cars

Defence Force chief General Siphiwe Nyanda admitted late this week that he got a R500 000 Mercedes-Benz at a massively reduced price from a company that will rake in millions from South Africa's controversial arms deal.

Nyanda got his new silver S320 just after it was ordered by the European Aeronautic Defence and Space Company as a "private staff" car.

EADS is the same company that ordered the luxury green 4x4 Mercedes ML320 and silver Mercedes C180 saloon that ended up in the hands of ANC Chief Whip Tony Yengeni and his wife Lumka.

Today the Sunday Times can also name two key officials who received whopping discounts on their own Mercedes-Benzes while they were negotiating the R43-billion arms deal on behalf of the government. They are former Armscor chief executive Llew Swan and the Department of Trade and Industry's director of industrial participation, Vanan Pillay.

A continuing investigation by this newspaper has uncovered seven vehicles, collectively worth R2.3-million.

The best discount offered on one of them was R168 000 and the least was R9 000.

Documents in the possession of the Sunday Times reveal that a Mercedes S320 was ordered as a private EADS staff car for "Chief of Defence, Gen Nyanda".

The car, boasting heated grey leather seats that massage the driver's back on long journeys, was registered at the traffic department in Nyanda's name on January 8. It was never registered in the name of EADS.

EADS will benefit from the arms deal, through a joint venture, from two contracts worth more than R420-million. The company is made up of DaimlerChrysler Aerospace , Aérospatiale Matra of France and Construcciones Aeronáuticas of Spain.

In September last year it was announced that Aérospatiale Matra would supply Exocet missiles for the SA Navy's new corvettes in a deal worth more than R200-million.

EADS owns a 33% stake in Stellenbosch-based Reutech Radar Systems, which got a R220-million contract to provide tracking radar on the corvettes.

When the Sunday Times contacted Nyanda on Friday, he was at first unclear about how he got the car.

"I traded in my old car and then bought the new one," he said. Asked if he bought it from a dealership, he said yes. Pressed for the dealer's name, he then said the car was bought via "a friend". He named Michael Woerfel, managing director of EADS.

"I needed a car; someone said Woerfel could have a good deal. I was hunting for a bargain," Nyanda said. Woerfel said yesterday he had handed information to investigators probing the deal. He had no further comment.

The Sunday Times has established that Nyanda got a second Mercedes-Benz, an E320 AMG worth about R400 000. He got it in October 1998, the same month Yengeni took delivery of his 4x4.

EADS admitted to the Sunday Times in April that it helped 30 "VIPs" get fancy cars. Arms deal investigators will have to determine what their motive was and why the "VIPs" did not buy their cars from regular dealers.

The two other high-ranking officials, Swan and Pillay, got generous discounts on their Mercedes-Benzes via deals with DaimlerChrysler Aerospace, a division of Mercedes-Benz manufacturer DaimlerChrysler that was incorporated into EADS in July 1999.

Swan and Pillay were part of a powerful "international offers negotiating team" that reported to the Cabinet. Traffic licensing records show that Swan registered his green ML320 four-wheel-drive on June 29 1999. Pillay registered his C250TD exactly one month later. Both said there was nothing sinister about the discounts offered or the way they bought their cars.

When asked about his discount, Swan, who sold his car "a few weeks ago", said he "would have liked a bit more [of a discount]". "Because of my business dealings I just asked [DaimlerChrysler Aerospace] what deal they could give me," said Swan.

Pillay said government employees were not well paid but officials were able to negotiate good discounts. "There was nothing sinister in how I got my car. I didn't buy it from a dealership. I went to DaimlerChrysler Aerospace and they facilitated the deal," said Pillay.

"If I had known there was this thing [the Yengeni controversy], I would have taken the BMW," he said.

Yengeni has refused to explain publicly how he got his 4x4 since the Sunday Times confronted him in his Cape Town office 123 days ago, but he says it was bought legitimately.

The C180 driven by his wife and the sporty red SLK320 belonging to his Congolese friend Wivine Ndlandu Kavidi were both ordered as private EADS staff cars. Traffic department records show the cars were later registered in their names.

At the public hearings into the arms deal this week, Armscor's senior manager of acquisition systems, David Griesel, said there was "no possibility of bias" or manipulation in how the primary suppliers were selected.

"There was no space for any personal attempt to manipulate the process," he said.

The EADS joint venture, however, is a subcontractor in the arms deal.

The hearings form part of a multi-agency probe into the arms deal by three government agencies.

They are the Auditor-General, the National Directorate of Public Prosecutions and the Public Protector.

In what appeared to be a reference to Yengeni, Trade and Industry Minister Alec Erwin said at the hearings: "There is no way in which a single MP could have possibly influenced this deal."

Yengeni did, however, play a political role. He headed the Joint Standing Committee on Defence, which played an important part in the decision to buy the arms package in the first place.

With acknowledgement to Jessica Bezuidenhout and Andre Jurgens.