Publication: Mail and Guardian Issued: Date: 2006-08-22 Reporter: Sapa Reporter:

French Arms Probe Reopens with SA Connection

 

Publication 

Mail and Guardian
Date

2006-08-22

Reporter

Sapa

Web Link

www.mg.co.za

 

French arms group Thales, whose South African subsidiary Thint is accused of corruption alongside Jacob Zuma, has a new headache, the Pretoria News reported on Tuesday.

A dossier that Thales thought French investigators had closed has been opened again, with a South African connection. The affair concerns the sale of warships by France to Taiwan.

In 1991, the Taiwanese, who wanted to diversify their suppliers of military hardware and reduce their dependence on American suppliers, bought six super-sophisticated La Fayette frigates from France.

It was a €2,5-billion contract *1 for the state-owned French naval shipyards and for Thales (then called Thomson CSF), which was to fit the boats with all the necessary electronics.

An international group with an annual turnover of $10-billion, specialising in electronic equipment for boats and aircraft, satellites and security, Thales was well placed to meet Taiwan's needs.

This deal had been at the centre of a judicial investigation in Paris since 1997. French industrialists were suspected of having paid hefty commissions to government agents from Taiwan and China, and of having organised a system of paybacks to French political figures.

In July, Alain Richard, who was minister of defence between 1997 and 2002, even admitted to knowing about these huge paybacks. He explained the system had been set up with the approval of then-president Francois Mitterrand, and Edouard Balladur, the prime minister between 1993 and 1995.

Mitterrand has since died, but Balladur has denied everything.

In the investigation, no details were supplied to the investigating judges, Renaud van Ruymbeke and Xaviere Simeoni. The two judges noted that Balladur's right-hand man when he was prime minister was a former Thales executive. But even if they asked him to testify, there was little chance they would get new revelations.

In 2001, the Swiss bank accounts of the man who acted as an intermediary between France and Taiwan were seized. This businessman was paid a tidy sum on the frigates contract -- about $520-million *1. But the problem was that the money never left the accounts, so in principle it was never distributed *2.

Since 1997, no proof had been found by the judges that paybacks were paid to French politicians. But a few weeks ago a surprise witness rekindled the judges' interest in the frigates sale and opened a new line of enquiry involving South Africa.

The witness, Jean-Jacques Martini, is a former commissioner of the Direction de la Surveillance du Territoire, the French counter-espionage service, which is part of the ministry of the interior.

After years in another department, he had just retired at 60 and moved south to Provence. Questioned by judges in another matter, which had nothing to do with the frigates, Martini raised the issue of the frigates, suggesting the funds might have been paid through a subsidiary of Thales in South Africa.

His remarks were reported in Le Point, a French weekly, prompting Martini to send out a statement in which he said his remarks had been made in the course of a "very informal" conversation.

During his career, Martini was in daily contact with executives from right across the French industry: Thales, Matra, Dassault, Airbus and Sagem. The former commissioner knew the secrets of all these companies and the background to the big contracts signed abroad.

Which is why, in Paris, the investigation has been relaunched on the dossier French investigators had been busy with for nearly 10 years.

With acknowledgements to Sapa and the Mail & Guardian.


*1       Kickbacks of about 20% in this deal. In the Sa deal they are estimated to be between 5% and 10%.


*2      The Taiwanese authorities and investigators were so desperate to get their money back that they moved too quickly and didn't allow the crime to properly mature.