DaimlerChrysler SA says it has been the target of distorted reporting recently

DaimlerChrysler SA moved yesterday to distance itself from the European Aeronautic Defence and Space Company (EADS) the Daimler subsidiary mired in the R43bn arms deal controversy, insisting that the two were "separate companies worldwide" and that the car producer is one of the country's "most loyal direct foreign investors".

DaimlerChrysler SA also said in an angrily worded statement that while it had been the target of "untruths and distorted, relentless and nakedly aggressive reporting in recent weeks" it was well known that "reporters, editors and publishing executives are among the beneficiaries of discount schemes offered by many motor manufacturers".

The statement, which did not name journalists who may have received discounted vehicles, came after a list of personalities supposedly given discounted Mercedes vehicles was published in The Star newspaper yesterday.

DaimlerChrysler SA management said it had become increasingly frustrated and embarrassed by juxtaposition of its brand with people who may have influenced purchasing decisions in the arms deal. Most have been sold discounted cars by EADS, which bought them from the manufacturer on intracompany discount arrangements.

EADS has become a major supplier of naval components ordered as part of the arms deal.

DaimlerChrysler said it had never sought to influence anyone inappropriately, and discounts and assistance with vehicles was a "normality of the marketing exercise" practised by many motor manufacturers.

The company said that 13 of the 33 vehicles reported in The Star yesterday were used cars and attracted different discounts.

"Assistance with vehicles has been made available to our business partners and to decision makers with whom we have entirely legitimate relationship.

"In a very few cases, personal friends including retirees had been assisted," Lulama Chakela, spokeswoman DaimlerChrysler SA said.

At the same time, EADS has again admitted it had supported 30 SA VIPs in obtaining MercedesBenz cars, but refused to supply any names.

EADS will benefit from the arms deal, through a joint venture, from two contracts worth more than R420m. The company is made up of DaimlerChrysler Aerospace, Aérospatiale Matra of France and Construcciones Aeronáuticas of Spain.

EADS also owns a 33% stake in Stellenbosch-based Reutech Radar Systems, which received a R220m contract to provide tracking radar on the corvettes.

A spokesman for EADS in Munich, Rainer Ohler, said the only service the conglomeration of companies had given, was "to make sure that the cars were delivered (to the VIPs) a little earlier. We moved them up the waiting list".

Ohler refused to confirm the list but said EADS was co-operating with the authorities investigating the now controversial arms deal to "try to clear up what happened".

He said some EADS employees had been interviewed by one of the bodies investigating the arms deal, but again refused to give out names of the employees.

Said Ohler: "There is not anything special about VIPs being moved up on waiting lists I don't think that's anything special.

"We have submitted all that needs to be said on the issue to the authorities, whom we are giving all our co-operation."  

With acknowledgement to Kgamanyane Maphologela, Bonile Ngqiyaza and Business Day.