Der Spiegel Report Ruffles Feathers in South Africa [defenceTHINK, 2006-07-03]

Publication: defenceTHINK Issued: Date: 2006-07-03 Reporter: Leon Engelbrecht Reporter:

Der Spiegel Report Ruffles Feathers in South Africa

Publication	defenceTHINK!
Date	2006-07-03
Reporter	Leon Engelbrecht

A report in this week's issue of German news magazine Der Spiegel has rekindled the debate over corruption in South Africa's 1999 arms acquisition programme. This time allegations of bribery is being leveled at the Meko A200SAN frigate buy. Der Spiegel reported on Monday that the "irregularities" were suspected of occurring in 1999. South Africa bought the four frigates as part of an effort to modernize its navy. The Thyssen-led German Frigate Consortium won the contract to build the vessels.

"We are conducting an inquiry," Dusseldorf prosecutions spokesman Peter Lichtenberg said when asked by the Deutsche Presse-Agentur, the German news agency, for comment on the Spiegel story. He declined to disclose more, saying this might harm the inquiry. Der Spiegel's report said it was suspected that the equivalent of 15 million euros (19 million dollars) may have been paid in bribes and then concealed in the shipbuilders' accounts as "expenses." It said the possible charges included bribery and tax evasion.

The magazine said there had been a coordinated raid on June 19 on the offices of consortium partners Blohm and Voss in Hamburg, HDW in the Baltic port of Kiel, Thyssen Rheinstahl Technik and MAN Ferrostaal in the western city of Essen. Thyssen Group spokesman Klaus Pepperhoff said, "We are confident that this suspicion will not be confirmed as the inquiry proceeds." The prosecutor declined to confirm the raids. Issuing its report before publication on Monday, Der Spiegel said prosecutors, police and tax officials were now studying the records seized.

The post-apartheid government in South Africa decided in 1994 to buy new warships, but the German consortium was scratched from the five-country shortlist of suppliers in December of that year, Der Spiegel said. By that point, only British and Spanish suppliers were left in the race. But four weeks later, the Germans suddenly came back onto the shortlist, with President Thabo Mbeki announcing during a visit by a German minister and businessman that the issue was wide open. The magazine said the Germans then moved to the front in a complicated tendering procedure and an order for the four warships was signed on December 3, 1999. The decision was criticized in South Africa, with an inquiry concluding in 2001 that the Germans should have been eliminated in
the first round for failing to meet several requirements, Der Spiegel said.

On Monday South Africa's domestic news agency, Sapa, reported that German prosecutors have not approached the National Prosecuting Authority (NPA) to help investigate the reported kickbacks.

NPA spokesman Makhosini Nkosi said the office had received no requests from the German authorities on the issue. Nkosi could also not comment if the NPA would be investigating the claims. "I do not know if the matter is on the radar screens or not," he said.

With acknowledgements to Leon Engelbrecht and defenceTHINK!