There was a conflict of interest in the role played by the department of defence's chief of acquisitions Chippy Shaik, according to the forensic report on the arms deal.

This arose through his brother Shabir's indirect interests in the Thomson Group and EADS - companies that were awarded contracts for the supply of combat technology for corvettes.

The report says Chippy Shaik declared the conflict of interest in December 1998, but continued to participate in the process that led ultimately to the awarding of contracts to these companies.

"He did not recuse himself properly," the report says.

It also says Shaik did not apply for or receive the military security clearance required by law.

The report says the involvement of former defence minister Joe Modise in a company that benefited from arms deal offsets was "extremely undesirable".

Modise had been actively involved in the procurement process before his retirement.

"Although no evidence of impropriety was found in this regard... such a situation seems extremely undesirable as it creates negative public perception about a process that might otherwise be in order," the report says.

Parliament should take urgent steps to ensure that high-ranking officials and office-bearers, such as ministers and deputy ministers, are not involved in contracts concluded with the state for a "reasonable" time after they leave public office.

This should apply both personally and to their involvement in companies.

On the issue of Shaik, the report says the department of defence and Armscor should develop specific rules and guidelines to address conflict of interest issues and ensure that personnel are properly informed on the issue.

Steps should also be taken to ensure particular individuals, regardless of their position, are not tasked with incompatible functions in "multifaceted procurements".

"This will prevent a conflict or perceived conflict of interest, which could have a detrimental effect on the overall acquisitions process."

With acknowledgement to Sapa and iafrica.com.