Bumpy Flight: A BAE Systems Hawk fighter, at the centre of a UK probe

"Fana Hlongwane is a former director of Denel and is now the chairman of the Ngwane Defence Group"

Scorpions to help in investigation into alleged bribe paid to former adviser to Modise

The controversial multibillion- rand arms deal is in the spotlight again with news that British authorities are investigating alleged “substantial payments” made by BAE Systems to a former senior South African defence ministry official.

The London-based Guardian newspaper yesterday reported that Britain’s Serious Fraud Office (SFO) has asked SA’s elite crime investigating unit, the Scorpions, to help probe the accounts of Fana Hlongwane, a prominent businessman and former adviser to the late defence minister Joe Modise.

Scorpions spokesman Makhosini Nkosi refused to comment. “We are not going to say anything for now because those who are close to the investigation are on leave,” he said.

The Guardian, quoting unnamed South African sources, said SFO detectives were expected to travel to Pretoria soon.

The SFO was investigating whether payments were made while Hlongwane was an adviser on the arms deal to Modise, it added.

Hlongwane is also former director of state arms manufacturer Denel. He is now the chairman of the Ngwane Defence Group, which comprises South African companies involved in the manufacture of defence equipment. He also asked former South Africa National Defence Force chief Siphiwe Nyanda to become chief executive and managing director. Ngwane’s businesses are largely export-oriented.

In 2003 the Guardian also reported that BAE paid a commission of £150-million (about R1,80- billion) to secure the contract for the Hawk fighter jet. There were also allegations that more than £500 000 was paid to Modise.

The Hawks are part of a £1,5- billion package put together by BAE and Saab to supply 24 Hawk fighter trainers and 28 Gripen light fighter aircraft to South Africa.

It has been alleged BAE Systems was given preferential treatment during the arms deal process *1. South Africa’s airforce chiefs had selected Italian aircraft as cheaper and more modern, but the amended specifications shifted the balance in favour of the ageing British Hawks ­ at nearly double the price.

A South African company, Osprey Aviation, has since been named as the “agent” that received the commission.

BAE, according to the Guardian, claimed Osprey had no links with anyone involved in awarding contracts.

However, it has since emerged that Hlongwane had close ties with Osprey. The Guardian claims that among Osprey’s shareholders was Tsebe Properties, of which Hlongwane is a director.

The Sunday Times has independently confirmed the existence of links between Osprey and Tsebe. Richard Charter, formerly chairman of BAE Systems South Africa, was one of the founding directors of Tsebe in 2000. Hlongwane was registered as director of Tsebe in 2001.

The Guardian said BAE Systems declined to comment on the specifics of the SFO investigation but quoted a spokesman as saying it was “co-operating fully” with the probe.

Attempts by the Sunday Times to obtain comment from Hlongwane were unsuccessful.

With acknowledgements to Dominic Mahlangu, Wisani wa ka Ngobeni, and Dumisane Lubisi and Sunday Times.