Publication: Noseweek Issued: Date: 2000-08-01 Reporter: Editor:

Shakeup or Shaikdown?


Publication  Noseweek
Date August 2000, Issue 30
Web Link


(Part One of a series on South Africa's R43-billion arms procurement programme - nose 30) 

Lambi Rasool, one-time owner of a motor repair shop on Albert Road in Durban, has earned a special place in the history of the African renaissance by fathering four talented sons. They are called Mo Shaik, Younis Shaik, Shamin Shaik (otherwise known as 'Chippy') and Shabir Shaik. But more about them anon.

African Renaissance is a new name for the old dream of African liberation first expressed 40 years ago by Ghana's Kwame Nkrumah. It aspires to the return of power and self-respect to the people of Africa; to freedom from foreign domination, and from demoralising poverty and ignorance.

Zimbabwe president Robert Mugabe, too, claims to be pursuing that dream when he invites his people to 'take back their land'. Yet the result is a 60% inflation rate, bank overdraft rates of 70%, mass unemployment and looming starvation.

Mugabe's campaign was designed to distract attention from the corruption in his government which has reached such disastrous levels that it is only thanks to President Thabo Mbeki's generosity with South African taxpayers' money that he has managed to avert full-scale rioting on the streets of Harare and Bulawayo.

When in early June, Uncle Bob reached out to Hansie Cronje, offering warm words of encouragement, we wondered: what could have inspired this extraordinary show of solidarity?

One of Uncle Bob's close friends is, of course, John Bredenkamp, notorious Rhodesian arms dealer now resident in Berkshire, and said to be worth R4.4-billion.

Bredenkamp controls Masters International, a company that manages the financial interests of several well known international cricketers, rugby players and golfers.

Mugabe and Bredenkamp are deeply involved in the war in the Democratic Republic of Congo, in return for which they have claimed their share in the DRC's fabulous mineral wealth. (The diamond area in the Congo has some 10 000 Zimbabwean troops stationed around it.)

The war now involves no fewer than nine African nations, and has been dubbed by some political analysts 'Africa's First World War'. It has destroyed the economy of the DRC, a country the size of Western Europe; hundreds of thousands of people have been killed and millions more made homeless.

John Bredenkamp is President Mugabe's main arms procurer and has provided arms, helicopters and pilots to the Congo.

So, how are we to understand Mugabe's words of caution to Hansie - 'My brother, this Satan, we must all watch out for him'?

Mugabe promptly added 'What is even more sad, is that it wasn't even much money. It's a pity, a real pity'. All very confusing - and telling.

In South Africa the dream of an African renaissance finds expression in the government's black empowerment programme.

Yet what are we to make of the continuing crises and scandals surrounding the allocation of the third cell-phone licence, the arms procurement programme, the allocation of mining and fishing concessions, and the privatisation of state assets ... ?

'Empowerment' can easily become a smoke-screen for corruption. One need only look back 50 years at Afrikaner 'empowerment' to see that.

When the National Party came to power in 1948, Afrikaners, too, lacked both capital and skills. All they had to 'trade' was their political power or influence. While poor and less educated Afrikaners could trade their votes for free schooling and jobs in the public sector, many in the new governing elite had bigger ambitions - they wanted to be rich. They could not favour Afrikaner mining, industrial or construction companies with government contracts - because there were no such companies. But they could use their influence to determine which non-Afrikaner companies got government contracts - for a fee. Those with influence and connections quickly constituted a new 'ten percenter' class, who took up residence in the eastern suburbs of Pretoria or the hills around Stellenbosch and Bellville.

The same conflict between public and private interest which arose then, is today threatening the African dream.

Is black empowerment a legitimate transfer of capital and top jobs to worthy members of the previously disadvantaged and disenfranchised communities, or is it plain corruption - a political elite abusing its power or influence to enrich itself at the expense of the masses?

Corruption is the only rational explanation for the government's decision to buy R30 billion worth of hi-tech weaponry - warships, warplanes and helicopters - from Germany, France, Sweden, Britain and Italy. So says the Coalition for Defence Alternatives (CDA) whose distinguished membership includes Archbishop Tutu, the S A Council of Churches, the Catholic Justice and Peace Commission, and the Quaker Peace Centre. They may be right.

An investigation by the British police into allegations that British Aerospace - a major participant in the arms package - paid R40 million, via a Swedish union, to 'sweeten' South African trade unionists who might otherwise have opposed the deals, has been called off. Why? The UK parliament has passed an Act which makes it a crime for Britons to pay bribes to get foreign business. But Prime Minister Tony Blair has delayed having it signed into law by the Queen. As long as he holds off, it is not a crime. No crime, no police investigation.

The major part of the arms package was negotiated by the previous minister of defence, ex- MK chief Joe Modise. But when he resigned last year, most of the deals had not yet been concluded - except for the submarine deal with a German consortium, which Modise signed just days before leaving office.

In private life, Mr Modise emerged as the new chairman and major shareholder of Conlog, a company with extensive interests in the overall armaments package. He is said to have bought his shares in the company for R40 million - which he apparently was able to borrow, interest free, from a friend in Germany. For reasons which remain obscure, this friend chose to send the money via Moćambique to the bank account of Kingsgate Clothing in Durban, rather than directly to Mr Modise's own account. Kingsgate Clothing is controlled by a certain Mrs Shaik. [Readers please note: Mr Modise has disputed these allegations, describing them as 'scurrilous and defamatory' - see Letters in nose31. - Ed.]

Although this information has been known in government circles for some time, there has been no official response. The chairman of the Defence Portfolio Committee, Parliament's watchdog over defence matters, is Ms Thandi Modise, a close friend of the former minister of defence since her childhood.

We must assume that President Thabo Mbeki does not propose applying gunboat diplomacy in his dealings with our neighbours, or that we should act as America or Europe's surrogate policeman in Africa.

In short, no-where has it been said that we want an offensive military capability.

Against whom, then, do we need a fleet of frigates and submarines and squadrons of the most modern fighter jets to defend ourselves? America! was one of the more desperate suggestions made by a defence spokesman, when trying to justify the deals to a parliamentary select committee.

Another reason was that we need long-range aircraft and warships to find and catch pirate trawlers in our vast and valuable fishing waters. But how can that be a real concern when we don't bother to impound those illegal trawlers that regularly sail into our ports to refuel and refurbish, before heading back to the plunder?

On a more general level, it is argued that all countries that cherish their independence must, even in the most peaceful of peace times, maintain a defence capability. One never knows what the future holds. Once lost, the skills and technology required for an effective defence force could take years to re-establish.

But what if the threat to the security of the state is not some theoretical future one, but the real and immediate threat posed by poverty and massive unemployment?

In order to make funds available for the new weapons purchases, the government has reduced the number of soldiers in the SANDF from 130 000 to 70 000, adding tens of thousands of men, trained only in the use of guns, to the ranks of the unemployed. How can that possibly make sense from a national security point of view?


And it's not just the troops who lose out: French arms supplier Thomsons has already contrived (using its local subsidiary ADS with its 'empowered' black partners to do the dirty deed) to have CCII, a local hi-tech company that has spent years developing a sophisticated information system to the SA navy's specifications, excluded from the deal - in favour of a dated French system they could not sell elsewhere.

A bit of history to ponder: In 1977 the UN imposed an arms embargo on South Africa. PW Botha's government immediately planned a massive - and dirty - programme to procure hi-tech armaments. A senior economist, Dr Robert Smit, was one of the few in Nationalist ranks who dared point out that black unemployment posed a much bigger threat to the Afrikaner state. The huge amounts the Botha government planned to spend on hi-tech weapons, a nuclear programme and other capital intensive projects should, he said, rather be spent on low cost, labour-intensive projects.

Privately, Smit told friends that he was aware of corruption in top government circles. He also feared that Israel and America had a huge vested interest in South Africa's weapons programme. Within weeks he was murdered by professional hitmen, who have never been identified.

Over the next ten years President Botha and friends spent an estimated R130 billion on arms procurement. Family was as big in the old SA as it is in the new: Botha's eldest son was a major arms procurer, while the Chief of the SADF, Admiral 'Boozy' Biermann, saw both his son and his son-in-law set up in the trade, where they profited handsomely from the arms programme.

Things did not go quite so well for the apartheid state. Instead of procuring its survival, the arms programme bankrupted it, contributing significantly to its demise.

Much of the old culture survives in Armscor and its satellite companies. The 'old' South Africa spent R2 billion on developing the Rooivalk attack helicopter. Not one was sold. Yet, in 1998, new defence minister Joe Modise was persuaded to spend another R100 million on the project. Hopes for the Rooivalk are now pinned on sales to Algeria ... where our hero Lambi Rasool's son, Riaz ('Mo') Shaik, has recently been appointed South Africa's ambassador!

Which brings us to our tale about the brothers Shaik. In the early 1980s, Mo and Younis Shaik were students at the University of Durban Westville, where they fell under the spell of those old stalwarts of the Natal Indian Congress, Pravin Gordan (today Commissioner for Inland Revenue), Younis Mohamed and Goolam Baker.

(Shortly thereafter Baker left for Cape Town, where he inspired the revolutionary likes of Trevor Manuel and Cheryl Carolus. So inspired them, in fact, that in 1985 they wrote to ANC headquarters in Lusaka to report that they thought Alan Boesak had his hands in the cash box. Trevor, at least, has since become more indulgent and forgiving - since Alan used some of his donor funds to buy Trevor a motor car, that is. Alan did, sort of, remind him of this on his way to jail ... but we digress.

The Shaiks' mentor, Goolam Aboobaker is today Chief of Policy Coordination & Advisory Services in the President's office).

In 1981 Mo travelled undercover to Swaziland to make contact with the ANC underground. Upon his return to Durban, he recruited his brother Younis to help him set up a new ANC intelligence network.

Among the friends the Shaik brothers recruited for their network were Shaheen Bawa (today head of technology at Cell-C) and Abu Omar Jacoob (today deputy head of Government Communications and Information Services in the Presidency).

In 1985 Mo and Younis Shaik were detained by the Security Police. But in 1988 Mo was back in business with a new spy operation for the ANC. It was code-named 'Vula' and third brother, Shamin Shaik - better known as 'Chippy' - was to play a starring role.

Chippy managed to get a job as draughtsman at UEC Projects, an Altech subsidiary involved in various defence projects for the apartheid government. He was introduced to the company by his wife, Zerena Mohamed-Shaik, who already worked there as a personnel clerk. Within no time Chippy was smuggling top secret information out of the company's files to the ANC. No matter that it didn't mean a thing to the struggle - it was a great spy coup for Mo.

When, in 1990, the ANC leadership returned from exile to hold their first congress (at UDW) and to negotiate with the old regime at the World Trade Centre, Mo Shaik was put in charge of their security. When it was time for ANC intelligence cadres to be integrated into the existing state intelligence structures, Mo (who qualified as an optometrist at UDW) did the co-ordinating. In the same year Mo found the perfect role for the only brother who had as yet not featured: Shabir. At Mo's suggestion, Shabir Shaik was sent on a mission to Malaysia to raise funds for the ANC.

Shabir became an advisor to the treasurer general of the ANC, Thomas Nkobi. (Nkobi's long-time lover, Gill Marcus, is today a deputy governor of the Reserve Bank.) When Nkobi died, Shabir used funds from Malaysia to establish a trust fund named after him. Little is known about the affairs of the Nkobi Trust, although foreign visitors hoping to do business with South Africa frequently felt inspired to make donations to it.

Shabir's career as fundraiser experienced a small hiccup in 1995 when, for unknown reasons, President Mandela's attorney, Ismail Ayob, wrote to the Malaysian prime minister, Mahatir Mohamed, to inform him that Shabir did not represent the ANC.

But, scarcely a year later, Shabir had a new patron, Jacob Zuma, who promptly took him along as his personal advisor on an official visit - to Malaysia!

Shabir also accompanied his friend the minister of public enterprises, Jeff Radebe, on an official trip to Russia. (Which reminds us: Like Mugabe, Radebe's wife, Bridget, too, has diamond interests in the DRC - in the area where the South African UN contingent will be keeping the peace, or so it is said.)

So much for the past.

Today Shabir Shaik is still a director of various companies controlled by the Nkobi Trust. Amongst them is Kobihold, which controls both Kobitech, supplier of computerised simulation systems to the defence force, and Kobitel, aspirant empowerment partner in the cell-phone bid.

He also has a new directorship. Remember UEC Projects, the old defence company that brother Chippy so successfully infiltrated? It has since been sold to French arms supplier, Thomsons, who have cleverly renamed it African Defence Systems (ADS) - and, just as cleverly, appointed Chippy's brother Shabir to its board of directors.

Old spy Shamin 'Chippy' Shaik has, of course, moved on. When defence minister Joe Modise was negotiating our weapons programme, Chippy was his right hand man. Now Joe has moved on, but Chippy remains as the government's Head of Defence Procurement. He heads the committee that decides on all our weapons purchases.

Thomson's will be forgiven if they thought that, in their line of business, Shabir's was a very good family connection to have - even if Chippy insists that he recused himself from the meeting at which it was decided to award a good chunk of the R30 billion deal to Thomsons' subsidiary, ADS.

Thomsons clearly have an eye for a man with the right connections and experience: ADS has acquired a black empowerment partner in the form of a company called Futuristic Business Solutions. Directors of FBS are Lambert Moloi (who is former defence minister Joe Modise's brother-in-law) and Tsepo Molai (who, in turn, is Lambert Moloi's brother-in-law). A laugh a minute, isn't it? But on with the Shaiks.


Younis Shaik, a lawyer, is today head of the Council for Conciliation, Mediation and Arbitration. In addition, he and Yussuf Surtee - Nelson Mandela's shirt supplier and the Saudi royal family's local rep - are directors of Ipostel, an 'empowered' member of the Cell-C consortium. Younis has also joined various other Party dignitaries on the board of Ubambo, a second 'empowerment' partner in the Saudi-backed bid.

At least Younis has nothing to do with arms dealing, you say? Wrong. The Saudi's, it seems, are determined to win SA's third cell-phone licence - so much so that they've made it a condition of several extremely lucrative arms-for-oil deals: no cell-phone licence, no deals. Which was, one supposes, meant to ensure a no-lose situation for all of them. Communications minister Ivy Matsepe-Casaburri did her best to 'fix' it - but then the judges of the Pretoria high court went and opted for a shake-up rather than a Shaikdown, and have ordered a review of the entire process.

Maybe this crisis situation calls for the talents of the fourth - and main - Shaik.

His Excellency Mo Shaik is today our ambassador in Algiers - and the right man for the job he is, too, because Muslim Algeria is about to displace Hindu India as South Africa's biggest customer for arms. In fact, the whole of Muslim north Africa is a veritable arms bazaar.

And just across the gulf are America's two great Muslim standbys, Saudi Arabia and Pakistan. Twenty-five years ago their dream to dominate the Muslim world was embodied in a vast but shady banking empire known as the Bank of Credit and Commerce International (BCCI). It was set up by Pakistani bankers, funded by the Saudi Royal family - and used by the CIA for various dirty cold-war operations.

BCCI's ultimate mission was to acquire international influence - and a nuclear weapons capability - for its masters. It collapsed some years ago under the weight of intrigue and corruption - before its mission could be accomplished. But the men - and the dream - live on.

Today the Saudis - rather like the Israelis of yore - are frequent visitors to Pretoria, where it is fervently hoped that they will buy some billions' worth of our G6 cannons - the first artillery piece in the world capable of 'delivering' a nuclear warhead. For the sake of the children's fund, naturally.

Can the Shaiks and friends in high places still manage to pull off the deal? If they don't, we are told by the Mail and Guardian, there could be some nasty questions to answer about a sum of R100 million that the government has already secretly paid out to Saudi influence brokers and as yet unnamed South African 'middlemen' to 'sweeten' the G6 deal. No surprise then, that those old movers and shaikers Trevor Manuel and Jeff Radebe have been summoned to try and put right for the Saudis what Ivy did wrong.

Shaik, rattle-n-roll, it's African renaissance time, baby! [To be continued.]

Here are two tasters from our next installment on the subject of black empowerment and related issues:

q During Swedish Prime Minister Goran Persson's visit to SA last year, his advisor Roger Hallhag admitted that 'offsets' are internationally discredited because they are so open to corruption. Why, then, was Sweden persisting with them as part of its arms deal with South Africa? "Lower standards apply in third world countries," he replied.

q Informal sexual relationships were a feature of the liberation movements' life in exile - and remain both common and very influential in the new government. Not that they were that rare in the 'old' SA. Think only of ... don't miss our next issue!

With acknowledgement to Martin Welz and Noseweek.