The outcome of the probe into South Africa's arms deal could prompt a large lawsuit against the state, a private defence contractor said yesterday.

Richard Young confirmed that he considered suing the state for between R100 million and R200 million over alleged irregularities in the procurement of the defence package.

Asked at the Pretoria hearings into the arms deal whether he still intends going to court, Young said: That will depend on the outcome of this investigation."

Young is the managing director of Communications Computer Intelligence Integration Systems (CCII), a Cape IT company.

He contends there were irregularities in the awarding in the awarding of a R40 million tender for information management systems (IMS) used in the four corvettes South Africa bought.

CCII was named the preferred supplier of these systems, Young claims. The tender was, however, awarded to French company Detexis, the sister company of African Defence Systems (ADS), of which arms acquisition head Chippy Shaik's brother, Shabir, is a director.

On his public complaint about the loss of the contract, Young denied he was mischievous by saying in a television interview that eh Detexis product is old technology.

"You planted the idea in the public mind that taxpayers' money had been spent on a dud," said Martin Kriegler, for ADS.

Young responded: "I was not mischievous, but was reacting to questions."

Kriegler said he will demonstrate that the Detexis system is cutting-edge technology, adding it was also acquired by the British navy.

Young maintained that the Detexis technology is "extremely retrogressive", and has been used since the 1950's.

Kriegler suggested that Young started developing the IMS technology while working for the company UEC Projects under an Armscor contract in 1991.

"Now you say this is your own technology," Kriegler said.

Young replied that the work done at UEC on the IMS only related to basic technology, but conceded that this was what he described as "the embryo stage" of his product.

Terry Mahon, for Shaik, grilled Young on his assertion that Shaik did not recuse himself from all meetings where his conflict of interest was relevant.

Mahon quoted from minutes of meetings where Shaik withdrew. These included minutes of a meeting on August 24, 1999, which was cited by Young in his testimony.

Young, however, said Shaik only rescued himself after the data systems had been discussed.

Individuals implicated by Young in the morning will today be given an opportunity to give evidence in rebuttal. They include retired navy chief Rear-Admiral Robert Simpson -Anderson and Rear-Admiral Johnny Kamerman.

With acknowledgements to Sapa and Natal Witness.