Publication: Daily News Issued: Date: 2004-11-30 Reporter: Estelle Ellis

Conflict of Interest in Arms Deal, says MP

 

Publication 

Daily News

Date 2004-11-30

Reporter

Estelle Ellis

Web Link

www.dailynews.co.za

 

Some say that IFP MP Gavin Woods has been waiting five years to speak about the arms deal.

Yesterday, he broke the silence.

Woods was called by the state to give evidence in the corruption and fraud trial of businessman Schabir Shaik in the Durban High Court.

Today he was to continue his evidence, which commenced yesterday with a description of the background to the Standing Committee on Public Accounts' (Scopa) investigation into the arms deal.

Woods said that Scopa was very much aware that history showed that malpractice took place in arms deals, mostly because of the clandestine way in which they were concluded.

"There was no reason why South Africa had to be different," he said.

Woods said Scopa was concerned that key stages of the arms procurement process had broken down, which opened the door for abuse.

He added there was a conflict of interest between Shaik, who "had an interest in the arms deal", and his brother Chippy, who was the Department of Defence's chief procurement officer and as such "extremely influential".

"We found that we had been misinformed that Chippy Shaik had recused himself (from meetings). According to minutes, he remained at meetings and remained influential," Woods said.

The court heard that French arms company director Alain Thetard had said many people asked him for bribes, but he considered it "normal practice" to string them along to retain their goodwill.

Thetard is refusing to come to South Africa to give evidence. But the court heard from auditor Gary Parker, who had confronted Thetard over bribery allegations.

A part of his evidence was only admitted provisionally after Shaik's counsel, Francois van Zyl SC, objected, saying it was "double hearsay".

The state is relying on a legal exception that makes the disputed parts of Parker's evidence admissable.

But the court is only expected to hear argument on this later.

Parker is a chartered accountant who in 2000 worked for Arthur Andersen.

He handled the audit of the two South African Thomson companies headed by Thetard.

Thetard's secretary at the time, Sue Delique, claimed that she was asked in March 2000 to type a letter written by Thetard and fax it in encrypted form to Thomson headquarters in France.

The letter described an alleged bribe agreement between Thetard, Shaik and Zuma.

Shaik has admitted that the three of them had a meeting but is expected to testify that it was about a donation to the Jacob Zuma Education Trust.

When Delique left the company, she told the court, she accidentally took the handwritten letter Thetard had given her, and a disk with a typed copy of the fax, with her. She later told Parker and his colleague David Green about it.

She told them that Thetard had paid bribes to a senior government official for defence contracts, Parker said.

"She did not hand us anything. She had an A4 envelope with her and said the letter was in there. She was very scared. She was smoking incessantly," he explained.

Parker, in turn, confronted Thetard with Delique's claims.

"He denied it. He said he was sometimes asked for bribes. To maintain the goodwill of those asking him, he would string them along. Head office would then refuse their request. It was a normal practice he undertook."

Parker said the company's books were checked again for possible bribe payments, but none were found.

"We considered the matter closed," he said.

Van Zyl said Shaik knew nothing about the fax or about Parker's dealings with Delique and Thetard.

The court also heard that Shaik had asked a building contractor, Eric Malengret, if Zuma thought "money grew on trees", but in the end Zuma had paid all the money for his Nkandla traditional development.

Malengret was the contractor for the development.

The trial continues.

With acknowledgements to Estelle Ellis and the Daily News.