Publication: Mail and Guardian Issued: Date: 2001-11-02 Reporter: Mungo Soggot Editor:

Nkobi Family Distances itself from Arms Firm


Publication  Mail & Guardian
Date 2001-11-02
Reporter Mungo Soggot
Web Link

The family of African National Congress stalwart Thomas Nkobi has implicated ANC heavyweight Joe Modise in an allegedly fraudulent ploy by a businessman embroiled in the arms scandal to use Nkobi's name in bids for defence contracts.

Shabir Shaik, whose Nkobi Holdings company was raided last month by the Scorpions as part of the arms deal investigation, has long claimed that the Nkobi Family Trust is a shareholder in Nkobi Holdings, apparently justifying the use of the name.

When the Mail & Guardian first published on Nkobi Holdings in February, the Nkobi family lawyers contacted the newspaper to say they had no idea they were shareholders in the holding company or that such a trust even existed. The family subsequently sought to strike a deal with Shaik.

But this week the family berated both Shaik and ANC luminaries, saying they had approached the party and President Thabo Mbeki himself in an attempt to reach some form of settlement with Shaik, but had got nowhere.

In a letter from its lawyers, the family directly implicates former defence minister Joe Modise in Shaik's allegedly dishonest use of the Nkobi name.

The letter, from the Johannesburg law firm Jordaan & Wolberg, says: "When our client [Nkobi's widow] first became aware of such unlawful use, she immediately complained, which resulted in Shabir Shaik and Joe Modise presenting her with a Trust Deed, presumably as a gesture of compensation for using her name. The Trust Deed was blank in critical places and was unacceptable."

Modise's involvement with Shaik over Nkobi Holdings raises fresh questions about the former defence minister's role in the arms deal, and whether he has an inappropriately close relationship with winning contractors.

There has been speculation, but no proof, that elements in the ANC benefited financially from the R60-billion package through companies particularly empowerment companies involved in winning bids. Until now, there was no evidence that Nkobi Holdings was anything other than an attempt by Shaik to cash in on the Nkobi name.

This week's letter suggests the ties between Shaik and sections of the ANC are stronger than previously believed. Shaik, who is close to Deputy President Jacob Zuma, is the brother of the army's chief of acquisition, Chippy Shaik.

Shaik has made much of his association with leading members of the ANC, in particular Nkobi, who was the ANC treasurer general. The Nkobi family says in the letter that neither Nkobi, nor his widow "consented to Shaik using their family name in the naming of his company, including numerous companies within the group". Shaik's empire, which focuses on getting government contracts, includes several companies bearing the Nkobi name.

The letter says Nkobi's widow "persisted with her objections, through attorneys, the ANC and the president himself. Letters were written, meetings were held, but no agreement was reached and accordingly our client has still not consented to her family name being used."

Bheki Khumalo, spokesperson for the president's office, this week said: "I could not confirm that the president was approached by the Nkobi family."

The letter adds: "Shabir Shaik and the companies are therefore representing that they are using the Nkobi family name with the consent and approval of the Nkobi family, and that the Nkobi family is benefiting therefrom by virtue of being shareholders.

"We are instructed to record that the Nkobi family disassociates itself completely and unconditionally from Shabir Shaik and the Nkobi group of companies, and disapproves of the manner in which they conduct business."

Nkobi Holdings' Durban premises were searched in a surprise hit by the Scorpions last month, with simultaneous raids undertaken in Mauritius and France. One of the companies targeted in the raids was Thales International, in whose local arm, Thomson-CSF, Nkobi Holdings has a stake.

Steven Friedland, lawyer of Modise, said the M&G should contact Modise directly for comment. All attempts to reach Modise were unsuccessful.

Additional reporting by Nawaal Deane.

With acknowledgement to the Mungo Soggot and the Mail & Guardian.