Cape Town - The chief negotiator in the controversial multi-billion rand arms deal, Jayendra Naidoo, has since the conclusion of the deal taken up a shareholding in a company linked to the defence package, according to the Sunday Independent.

The report said J&J, a company owned by Naidoo and former communications minister Jay Naidoo, held a 2.5 percent stake in Primgro, which owns 25 percent of Tellumat, a company with defence contracts.

Naidoo had apparently confirmed the shareholding in an interview and in a written statement, but had denied knowing at the time of the acquisition that Tellumat had any contracts arising out of the arms deal.

The 2.5 percent share of Primgro was a "minor investment in J&J's portfolio", he said.

He was a "tiny shareholder. My shareholding is too small to represent any incentive to procure," Naidoo was quoted as saying.

Meanwhile, the Sunday Times reported that German authorities had uncovered enough evidence to launch a full-scale bribery investigation against Michael Woerfel, the suspended head of the European Aeronautic Defence and Space Company (EADS), a company with a stake in the arms deal.

Woerfel, a German national, and former ANC Chief Whip Tony Yengeni were on Wednesday charged with corruption arising from investigations into the deal.

He had allegedly given Yengeni a R167368 discount on the purchase of a luxury Mercedes-Benz 4X4.

Yengeni quit his position on Thursday after being released on R10 000 bail from the Cape Town Magistrate's Court the day before. 

With acknowledgment to Sapa and News24.com.