Cape Town - President Thabo Mbeki could announce as early as Wednesday afternoon whether he agrees that the Heath special investigating unit (SIU) should be excluded from the probe into South Africa's R43-billion arms deal.

"He is likely to make his decision known on Wednesday afternoon or on Thursday," presidential spokesman Nazeem Mahatey told Sapa in Pretoria on Tuesday.

It was not yet clear how the announcement would be made, Mahatey said.

Justice Minister Penuell Maduna announced on Monday that he had advised Mbeki not to issue a proclamation allowing the unit to become involved.

Unit Rejects Maduna's Reasoning

However, the unit on Tuesday rejected Maduna's reasons, and said it would make its own representations to the president.

It said in a statement that Maduna had misinterpreted a Constitutional Court ruling, and had relied on outdated information in making his recommendation to the president.

Maduna said on Monday that issuing a proclamation would fly in the face of last year's Constitutional Court ruling that Judge Willem Heath's position as head of the unit was unconstitutional.

But the unit said the minister had in effect misinterpreted the judgment, which did not prohibit new referrals to the unit.

"The SIU is of the opinion that it could have made a valuable contribution to the multi-agency probe, as we have the powers to both investigate and institute civil action arising out of the investigation," the unit said.

"The SIU will be making its own representations to President Mbeki in this regard."

Rejecting Maduna's reasoning that he had not had sight of the "much vaunted De Lille dossier" on alleged irregularities in the arms deal, the unit said it never sent all the documents related to a case to the justice department.

Neither the minister nor the department had ever asked for the documents received by Pan Africanist Congress MP Patricia de Lille, nor had the department requested additional information or clarity on the unit's motivation for a proclamation.

The unit said another reason given by Maduna was that no-one had given him information that suggested unlawful appropriation of public funds, and accordingly there was no need for the SIU to be involved.

Range of Functions

The unit said its functions were not limited to recovering misappropriated public funds, but also investigation of improper conduct or irregular acts by state employees, negligent loss of public money, and any corruption in connection with the affairs of any state institution.

Whether or not there was unlawful misappropriation of public funds could be established only after an investigation had been conducted.

It said a reference by Maduna to the workload of the unit was outdated, as it was based on the 1998/99 and 1999/2000 financial years and cases the unit had finalised.

The unit said though it was disappointed with Maduna's recommendation, it accepted the prerogative of the president to issue proclamations, and would have to accept it if the matter was not referred to the SIU.

It said a misperception had been created that the SIU itself believed it should not be involved in the investigation, as this would effect the credibility of the probe.

A civil investigation of this nature was highly technical and dealt with policy, procedure and legal aspects of procurement, contracts and tendering.

"Whilst the SIU does not consider itself to be indispensable to this probe, it does feel that it would be in a position to make a meaningful contribution to the investigation."

Also on Tuesday, United Democratic Movement leader Bantu Holomisa released an open letter to Mbeki saying that if the Heath unit was excluded from the probe, he was under a "compelling obligation" to set up a judicial commission with the same powers as Heath.

Without such a commission, the remaining state agencies involved in the probe - the Auditor General, the Directorate of Public Prosecutions and the Public Protector - lacked the capacity to carry out their mandate from Parliament.

Suspicion of Cover-Up

Holomisa said there were strong perceptions and suspicions of a cover-up as a result of the hostility to Heath of the African National Congress and "some government ministers".

Democratic Alliance spokesperson on public enterprises Raenette Taljaard said if Maduna wanted to avoid the perception that the court ruling was being used as a "mere alibi" for excluding Heath, he would have restated his commitment to pilot amending legislation through Parliament as soon as possible.

Fast tracking of crucial legislation was not unprecedented for his department, she said.

With acknowledgement to Sapa and News24.