Publication: Mail and Guardian Issued: Date: 2007-02-15 Reporter: Sapa

Shaik Company's Contract with Govt at Risk

 

Publication 

Mail and Guardian
Date

2007-02-15

Reporter

 Sapa

Web Link

www.mg.co.za

 

A Department of Transport contract with one of fraud convict Schabir Shaik's companies hangs in the balance, South African Broadcasting Corporation (SABC) news reported on Wednesday.

An announcement on the department's dealings with Prodiba, which had been manufacturing credit-card format drivers licences on behalf of the government since 1998, was expected next week.

Shaik resigned as director of the Nkobi group of companies, but one of his subsidiaries still held shares in Prodiba. The Public Finance Management Act forbids government departments from doing business with convicted criminals *1.

Transport Department director general Mpumi Mpofu told Parliament's Standing Committee on Public Accounts: "In the month of January alone we've been doing a whole lot of work with respect to this matter, with particularly the state law advisors, on how we proceed ... and we have firm opinion on how we should do that."

Scopa chairperson Themba Godi asked what specific course of action was likely to be followed.

Mpofu replied: "We will be acting on that legal advice and this committee will be duly informed ... I can't say more than that."

Shaik and his companies stand to lose a substantial amount of money. In the first phase of the deal, Prodiba was paid R260-million.

The SABC also reported that a decision on Shaik's 81-day stay in Durban's St Augustine's Hospital was expected soon.

The Correctional Services Department was studying a medical report from an independent specialist. If found fit he could go back to jail.

His medical aid, Discovery Health, was to decide on Friday whether or not to pay his medical bill, reported to be more than R500 000.

With acknowledgements to Sapa and Mail and Guardian.


*1       Shaik is/was a director and effective shareholder of Nkobi Holdings, Thomson-CSF (Pty) Ltd and African Defence Systems (Pty) Ltd (ADS). ADS not only has a R1,4 billion contract for the combat suites for SA Navy's new Valour-class frigates, but another very large contract in the SA Army's new Ground-Based Air Defence System (GBADS) programme.

If the Prodiba drivers licence contract is at risk, so ought to be these contracts.

Another director of Thomson-CSF (Pty) Ltd and African Defence Systems (Pty) Ltd (ADS) is one Alain Thetard. Not only is he a fugitive from South African justice, but he has effectively been found guilty of a crime involving ADS/Thomson-CSF NCS France's R2,6 billion contract for the SA Navy's new Valour-class frigates.

The juristic persons Thomson-CSF (Pty) Ltd and Thomson-CSF International have also effectively been found guilty by the High Court and Supreme Court of South Africa of a crime involving ADS/Thomson-CSF NCS France's R2,6 billion contract for the SA Navy's new Valour-class frigates.

When will the Public Finance Management Act be invoked against Nkobi Holdings, Thomson-CSF (Pty) Ltd, Thomson-CSF International and African Defence Systems (Pty) Ltd?

But all this is in the past.

More interesting is what lies, or should lie, in the future.

The South African government is presently negotiating with Thyssen Marine Systems, ADS and Thomson-CSF International for the supply of a 5th new Valour-class frigate for the SA Navy.

Additionally, Thyssen Marine Systems's predecessor in name, Thyssen Rheinstal Technik GmbH, has been indicated by the German investigating authorities as bribing the Chief of Acquisitions of the South African Department of Defence (DoD) wityh a US$3 million payment to secure its contract for the supply of four frigates to the DoD.

How will it be possible for the South African Government to place contracts on Thyssen Marine Systems, Thomson-CSF NCS France or ADS for the supply of a 5th new Valour-class frigate plus combat suite for the SA Navy?

Not only is President Thabo Mbeki trying to cover his own backside for his involvements in the previous frigate and combat suit deals, but any formalised conclusion of criminality or irregularity places an enormous difficulty of the Government in dealing with these criminal companies and individuals.