Arms Deal Continues to Haunt Government, as Latest Revelations are Revealed

Statement Issued by Bantu Holomisa, MP
UDM President

The UDM notes with dismay new reports that senior government politicians and officials were in fact involved in improper conduct during the Arms Deal, despite vehement denials by government.

One of the major issues raised originally regarding the Arms Deal was the involvement of senior politicians and officials in companies that would, or intended to, benefit from the deal. Specifically, investigation into Joe Modise's involvement in the company Conlog was brushed aside by investigators and government.

It now appears, according to the Financial Mail, that not only did Mr Modise benefit directly from this company, while still in government office, but that he and others also intended to secure contracts within the Arms Deal. What is equally disturbing is that senior government officials, who were directly involved in the Arms Deal negotiations, were also involved in Modise's dealings to acquire shares in Conlog. These people include Ian Deetlefs, then Chairperson of Denel, Ron Haywood, chairperson of Armscor, as well as Seshi Chonco then MD and future CEO of Denel.

Aside from the implications for the credibility of the Arms Deal and its investigation, the issue of corporate governance should also be considered. It appears that these men turned a neat R90 million profit, without declaring it to Log-Tek's shareholders, though the deal occurred at their expense. The eventual outcome of this saga is that most shareholders lost millions in the end. What remains unclear is whether these senior government officials profited before the company went bust.

This demonstrates that the Arms Deal will continue to haunt government until it is properly investigated; in the meanwhile taxpayers foot the bill for weapons at the expense of vital social and economic investment. Matters are only compounded when this same government laments the lack of foreign investment, while senior government politicians and officials are directly involved in dubious corporate activities, which tarnish the image of SA business.

Enquiries:

Bantu Holomisa, MP
UDM President
082 - 552 4156
Cape Town

14 March 2002