IN ACCORDANCE with your request, we report as follows:

In the brief time available, we looked at the available information and consulted certain interested parties to obtain more information, including Ms (Patricia) de Lille.

The auditor-general has pointed out irregularities which merit further investigation and it is too early to conclude whether criminal offences will be revealed. We are of the view that the preparatory criminal investigation being conducted by (Investigating Directorate for Serious Economic Offences) in terms of section 28(13) of the National Prosecuting Authority Act, No 32 of 1998 is warranted and justified.

In addition, there are sufficient grounds in terms of the Special Investigating Units and Special Tribunals Act No 74 of 1996, for a special investigating unit to conduct an investigation, and, in our opinion, such an investigation is warranted. We agree with the conclusions of the Special Committee on Public Accounts, namely that the investigation would be best conducted by a multidisciplinary team consisting of the Investigating Directorate for Serious Economic Offences (under the authority of the National Director of Public Prosecutions), the auditor-general, the public protector and the special investigating unit. Due to the scope of the investigation, it is, in our opinion, imperative that all the agencies referred to above should be involved at the earliest possible stage.

We have, however, also taken cognisance of the judgment of the Constitutional Court in the case of SA Association of Personal Injury Lawyers versus Heath and others (CCT27/2000), in which the court declared section 3(1) of Act 74 of 1996 and Proclamation R24 of 1997 invalid. In the light of this judgment, we recommend that the Act be amended as a matter of urgency, to meet the constitutional defects.

We have furthermore noted that, in terms of the judgment, Judge Willem Heath's tenure as head of the present special investigating unit will terminate as a matter of law within a year of the judgment, for as long as Judge Heath remains a judge. Given the magnitude and complexity of the investigation, a change of the head of the unit during the investigation might practically hamper the investigation.

Consideration could be given to appointing another special investigating unit under an acting judge, who could then be placed in a position to continue with this investigation by reverting to his personal status after the act is amended. Some existing members of the present unit could be appointed to the new unit, thereby retaining experience and expertise gathered by the present unit. Such a step would ensure continuity and be in accordance with good governance expected of the President in view of the abovementioned Constitutional Court judgment.

With acknowledgement to FW Kahn SC, Adv J Lubbe SC January 18 2001 and Business Day.