Cape Town - The ANC has told News24 that Tony Yengeni will retain his position as chief whip for the moment, despite the fact that he was arrested earlier on Wednesday in connection with fraud charges relating to his luxury 4x4 Mercedes Benz.

The ANC's spokesperson, Smuts Ngonyama, explained that his party was still waiting for tangible information relating to the charges, and that it will respond after the party has studied the information.

The party's political committee has announced that it will hold an urgent meeting on Wednesday to look into the matter.

Ngonyama cautioned that Yengeni should be presumed innocent until proven guilty by the courts of law.

But he added that should there be any truth in the allegations levelled against Yengeni, the party would not hesitate to take action.

Yengeni was released on bail of R10 000 in the Cape Town Magistrate's Court earlier in the day. He will appear in court again in January.

He handed himself over to the Scorpions investigating unit after a warrant for his arrest had been issued.

The charges arise from his acquisition of a discounted luxury 4x4 Mercedes-Benz ML320 vehicle from a company with interests in the multi-billion-rand arms deal.

Parliament to decide on Yengeni

Sapa has reported that Yengeni was seen briefly in parliament shortly before his court appearance, but did not return after he was granted bail.

He was also not at the weekly meeting of the chief whip's forum.

It is expected that opposition MPs will raise the issue at a meeting of parliament's ethics committee. The committee earlier in the year declined to investigate allegations against Yengeni.

Yengeni has repeatedly claimed his innocence. He made a special statement to the National Assembly earlier this year claiming he was innocent and accused the media of attempting to discredit him.

He pledged to co-operate fully with arms deal investigators. This prompted in a petition signed by ANC employees in parliament pledging their support and also accusing the media of waging a campaign against Yengeni.

In an effort to convince the public and the media that he was innocent, Yengeni recently embarked on an advertisement campaign in the mainstream media.

According to Scorpions' spokesperson Sipho Ngwema the luxury 4x4 is the subject of a fraud charge, which Yengeni is facing among other charges.

Yengeni became embroiled in controversy earlier this year over a discounted car he had acquired through a company - DaimlerChrysler Aerospace South Africa (DASA) - involved in the multi-billion-rand arms deal.

Yengeni was head of the Joint Standing Committee for Defence, during the acquisition of the arms package.

Former European Aeronautic Defence Systems head in South Africa, Michael Woerfel, who is also scheduled to appear in court in October, will face charges of corruption and forgery. He is currently overseas, but his lawyers have been served with a warrant for his arrest.

Earlier investigations into the arms-acquisition programme indicated that the Yengeni's car was ordered as a "staff car" by DASA, which is linked to the R43 billion arms deal.

'Yengeni must step down'

The Democratic Alliance, responding to Yengeni's appearance in court and subsequent release on bail, said that he must "step down".

According to the party, while Yengeni is innocent until proven guilty the charges against him are "serious" and there is "no way he can continue in his capacity as (ANC) chief whip".

"He should do the right thing and step down immediately," DA's spokesperson Douglas Gibson said on Wednesday.  

With acknowledgment to Mahap Msiza and News24.