A senior trade and industry department official has been dismissed for accepting a large discount on a Mercedes-Benz while he was involved in negotiations on the arms offset deal.

Trade and Industry Minister Alec Erwin said at the weekend he had upheld a decision by a disciplinary tribunal that Vanan Pillay should be dismissed.

Pillay had served as director of the department's national industrial participation programme. An official from the department said that had meant he had participated "in critical aspects of this (offset negotiation) process".

The car was bought through DaimlerChrysler Aerospace, now European Aeronautic Defence & Space company (Eads) one of the companies involved in the multibillion-rand arms deal.

The department said in July 1999 Pillay paid R141 000 for the vehicle, which was then valued at R196 000. Department directorgeneral Alistair Ruiters had said Pillay's activities had been viewed "in a dim light", although he had declared the purchase to the human resources department.

With acknowledgements to John Fraser and Business Day.