Suspended arms acquisition chief Shamin "Chippy" Shaik has been found guilty of illegally disclosing confidential information contained in the Auditor-General's draft report on the R43 billion arms deal late last year.

Defence spokesperson Sam Mkhwanazi said a departmental inquiry into Shaik's alleged misconduct would re-convene next week to decide on the sentence. Mkhwanazi would not divulge the details of the findings or misconduct charges against Shaik, save that they related to "the illegal disclosure of information".

Shaik is the brother of Schabir Shaik who was a director one of the companies which were awarded contracts to supply equipment for the South African navy's corvettes, and arrested last year for illegal possession of arms deal-related secret cabinet documents.

Weekend Argus are now allowed to reveal the events which led to Shaik's suspension by Defence Minister Mosiuoa Lekota last November, banning him from setting foot in any military installations in the country or the headquarters of the department of defence.

An Auditor-General's draft report, which was critical of Shaik's involvement in the arms deal, was handed to Lekota late last year. Lekota is said to have instructed his legal advisor, Joy Ratebe, to give the report to Shaik for comment.

Shaik was apparently upset by "factual inaccuracies" and passed on the report to his lawyers who took up the issue with Auditor General Shauket Fakie.

Shaik was then charged with misconduct and insubordination for disclosing details of the report to his lawyers.

"That does not constitute misconduct," his brother Yunis said angrily.

He threatened to take appropriate action after the sentence was handed down next week, including possibly going to the Commission for Conciliation, Mediation and Arbitration. Yunis Shaik said there would be "major consequences" if there were any punitive action against Chippy.

Fakie confirmed on Saturday that he gave the report to Lekota "to check it for factual inaccuracies".

Asked how Shaik's comments influenced the final report, Fakie said the input into his report which came from Lekota was mainly on perspectives and circumstances under which certain things took place. "A lot of input that came through from the minister was incorporated. Who he got it from, I don't know," Fakie said.

He added that Shaik was within his rights to seek legal advice, and "we told so him during our investigation".

With acknowledgements to Xolisa Vapi and Weekend Argus