Auditor-General Shauket Fakie has come under intense fire over a R30-million contract in the arms deal which was apparently awarded under shady circumstances.

This new allegation came to light on Wednesday as parliament's standing committee on public accounts (Scopa) grilled Fakie for three hours on claims of omissions and "doctoring" in the final report on the arms deal investigation.

Nigel Bruce of the Democratic Alliance said new information on the arms deal had revealed that African Defence Systems (ADS), the company of Durban businessman Schabir Shaik, had been given "undue privilege" in a R30-million arms subcontract.

He said ADS was allowed to lower its original quote, apparently to beat a rival tender from Richard Young's company C²I², and was allowed to submit a revised quote a day after the tender for an electronic information system had closed.

Bruce read from a letter, which he said was stamped by the auditor-general's office, showing that ADS was allowed to drop its bid from R32,47- million to R29,64-million.

Fakie said he could not remember the letter and asked to have a copy.

Clearly unhappy with Fakie's response, Bruce said: "This document does come from your office. It has your stamp on it. This can invalidate the deal. Is it an oversight? This is a critical matter, to my mind."

Fakie said later, after obtaining additional information, that ADS had made a mistake with its figures and had been allowed to change its tender.

He said about the matter in his special report tabled in June that "the nomination of a single supplier also created the potential for abuse of the nomination process and potential prejudice to the state, as was demonstrated by ADS's high tender of R64,73-million for the System Management System (SMS) which was reduced to R29,647-million after a competitive quote was obtained from C²I².

"ADS was the only nominated supplier for the SMS, and C²I², though not nominated, was apparently only invited to quote in order to lower ADS's quote."

During the investigation, no acceptable explanation for not applying a fairer and more transparent process was offered, Fakie said in his special report.

When the tender was awarded, Schabir Shaik's brother Chippy Shaik was head of acquisitions in the Department of Defence.

Bruce said afterwards that unless Fakie could satisfactorily explain why a potentially criminal act was glossed over in his reports on the arms deal, his claims that the final report was conclusive and exhaustive would fall flat.

"And he may, himself, have to face a substantive motion in parliament on the conduct of his department," said Bruce.

Young said afterwards that the questioning of Fakie by all parties in Scopa had been a "whitewash". He described the dubious circumstances around the awarding of the R30-million tender to ADS as a "conspiracy to commit fraud".

Fakie was either unaware of the details surrounding the tender and the ADS letter, or he was "obfuscating", said Young.

Young said he would be launching a court action to compel Fakie to produce documents about the deal that he failed to deliver despite an earlier court order.

Responding to Young's attack, Fakie said: "That is his personal opinion, and if he says I am lying, he must put the proof on the table. As far as I know, I have responded to the questions of Scopa."

Commenting on the initial difficulty he experienced in answering Bruce's questions about the letter, Fakie said thousands of documents were collected during the investigation and he could not be expected to remember every one.

He told Scopa he would give a detailed response after his office had considered the matter.

Responding to a claim that the arms deal investigative report had been altered on the instruction of the executive, Fakie reiterated his recent assertion that the report had not been "heavily edited" and "doctored". He insisted he had discharged his constitutional brief with integrity.

Fakie added: "I want to state categorically that due process was followed and that no changes were made to the report based on pressure from the president or the executive."

Vincent Smith of the ANC has called on parliament to discipline MPs who have impugned the integrity of the auditor-general.

With acknowledgements to Andre Koopman and The Star.