DaimlerChrysler South Africa (DCSA) has reacted sharply to a newspaper report naming "VIPs" who received discounted cars bought from it by the European Aeronautic Defence and Space Company (EADS).

EADS, a conglomerate of German, Spanish and French companies, is involved in an arms deal with the South African government. DCSA is a subsidiary of DaimlerChrysler AG, a German company which holds shares in EADS.

"The DCSA and its associate companies always had and always would operate strictly within the law. This co-operation will continue without reservation," a statement said.

In the context of the three-body probe into South Africa's multi-billion rand arms deal, this meant "full and wholehearted co-operation with the duly mandated authorities".

On Monday, the Independent newspaper group published a list of names of 33 "VIPs" who bought cars at a discounted rate from DCSA via EADS.

Only the surnames of the beneficiaries were printed, but appeared to include African National Congress chief whip Tony Yengeni, SA National Defence Force chief General Siphiwe Nyanda and former Gauteng premier Tokyo Sexwale.

Discounts on the cars ranged from 3,28% to 47,83%.

DCSA's statement said the company had been the subject of "untruths and distorted, relentless, and nakedly aggressive reporting in recent weeks".

This "unwarranted" attack from a minority in the media had "gratuitously" damaged South African economic and political interests internationally, it said.

DaimlerChrysler and EADS were separate companies worldwide.

"In South Africa, as elsewhere, each company pursues its business interests independently. To interweave the two despite several clear statements of these facts is nothing more than sloppy
journalism."

There "is a world of difference" between corruption and buying a car at a discount, the statement said.

Sexwale on Monday released a statement admitting that he purchased a car through DaimlerChrysler Aerospace at a discount.

DCSA spokeswoman Lulama Chakela said DaimlerChrysler Aerospace became extinct in 1999.

"This discount is something to which we are entitled, and would have insisted upon. We are aware DaimlerChrysler Aerospace has now been absorbed into EADS. At no stage did we have any dealings with EADS.

"We therefore view the attempt to link this genuine and legitimate purchase to the controversial arms transaction as mischief making and ridiculous."

The Democratic Alliance on Monday said EADS owed the country an explanation regarding its role in providing luxury cars to "VIP's".

DA public accounts spokeswoman Raenette Taljaard said it was with a "great degree of relief that we note the names of the arms deal VIPs".

"The DA has called for these names since the Yengeni scandal broke. But the fact remains that EADS acted as a discount car dealership during a crucial procurement negotiation for South Africa's Strategic Defence Procurement," Taljaard said.

She said EADS's commercial reputation was at stake and the company owed the South African public, and its own shareholders, a clear explanation why it entered the car selling business if it did not wish to influence key players in the defence procurement.

The United Democratic Movement said the published list of names further pressurised the already taxed team of investigators probing the arms deal.

UDM public accounts spokesman Gerhard Koornhof said the fact that the individuals named interacted with an arms supplier to acquire their vehicles unavoidably begged the question as to whether or not bribery was the main instigating factor.

The UDM was concerned that it seemed that not only politicians were involved, but also bureaucrats.

Of "special concern" was the implication of EADS managing director Michael Woerfel, who acquired four vehicles from sister company DaimlerChrysler, and had not adequately explained whom they were given to, Koornhof said.

"Furthermore, new names are being revealed and this raises the question about who they are and what their roles were in the arms acquisition."

The arms deal is being investigated by the Auditor-General, the Public Protector and the National Director of Public Prosecutions.

Meanwhile, the Department of Trade and Industry on Monday issued a statement on media reports regarding Vanan Pillay, the previous director of the department's national industrial participation programme.

It reacted to a report in the Sunday Times newspaper a week ago which stated that he bought an E-class Mercedes Benz through EADS at a discounted price.

Pillay said the vehicle was purchased through the government motor finance scheme. He said the transaction was reported to the department's human resources division and that the details were on file.

"On Tuesday, 26 June Mr Pillay lodged a submission with the department disclosing the purchase of the Mercedes C250 TD valued at R196000 for which he paid R141000 in July 1999 from Daimler-Chrysler Aerospace (now EADS). In his view, this constituted a full disclosure," the statement said.

"The Director General has launched a preliminary internal investigation to verify Mr Pillay's statements... The facts established by this exercise will determine the next course of
action, and the department will make public the findings of this exercise."  

With acknowledgement to Sapa and Business Day.