Draft reports released in court show evidence that passages detailing possible corruption were edited from the report into the multibillion-rand arms deal before it was presented to parliament.

The report exonerated the government of any wrongdoing in the conclusion of the controversial deal.

Richard Young, head of the unsuccessful bidding Company C2I2, now believes that new evidence given to him, by order of court, significantly changes this picture.

Young had been locked in litigation with the government after losing the tender to supply technology for the new navy corvettes.

Both pieces of evidence relate to African Defence Systems (ADS). ADS is headed by Schabir Shaik, brother of Chippy Shaik, chairperson of the Project Control Board.

Draft reports released to Young show evidence about a French arms firm buying out ADS and gifts to naval officers were edited from a draft report.

Young received the report after a court action forcing Auditor-General Shauket Fakie to give him documents relating to the arms deal investigation.

Fakie, national director of public prosecutions Bulelani Ngcuka and former public protector Selby Baqwa investigated the deal and submitted a final report to parliament.

When Young received the reports this week, he discovered that two major points that appeared in Fakie's draft were left out in the final report.

The edited passages said:

"Gifts received - A project officer received a farewell gift of R7 000 from ADS, and the receipt had not been authorised or reflected in a gift register;

"A project engineer received R4 000 as a farewell gift;

"Inaccuracies in the Scopa (standing committee on public accounts) presentation by the department of defence - Note that at the stage of the German Frigate Consortium offer (May 1998), ADS had not yet any connection with Thomson, and was a wholly owned subsidiary of the Altech group of companies owned by Altron."

This is followed by the statement "This is not correct. Thomson International bought the first 50 percent of the shares of ADS on April 24 1998."

Deputy president Jacob Zuma has dismissed charges that the cabinet meddled with the report.

Fakie said that what was edited out of the report was insignificant or under investigation. But on Thursday Young published a press release by Fakie, saying media reports that he had left references to gifts out of his final report were "factually incorrect".

Young said: "We believe that there were 15 or 20 drafts, and despite what Fakie has said, we believe that it went to the president personally, and he liked the public protector's draft but not the auditor-general's draft."

He said he had an audiotape of an interview Fakie did with a number of committees after the three reports were released.

In it, Fakie says he took the report to the president to determine if there were matters of national interests that had to be deleted. Fakie said he was told there were none, but he was asked not to use quotes from subcommittee meetings.

Young has instructed his lawyers to pursue a perjury case against Fakie.

With acknowledgements to Estelle Ellis and The Star.