Two high-flying arms traders - one blacklisted by the US for his alleged support of Zimbabwean President Robert Mugabe - are under investigation for their roles in South Africa's multibillion-rand arms deal.

The Scorpions, under the shadow of imminent disbandment, raided premises linked to Fana Hlongwane, believed to have been an adviser to the late defence minister *1 Joe Modise, and Zimbabwean arms trader and businessman John Bredenkamp.

National Prosecuting Authority spokesperson Tlali Tlali said the raids were conducted as part of the "ongoing investigations into fraud and corruption related to South Africa's fighter jet contract".

Tlali declined to comment on whether the Scorpions investigation was linked to a corruption probe by the UK's Serious Fraud Office (SFO), which has questioned the alleged substantial kickbacks that Hlongwane received from BAe Systems - a British company that won a multibillion-rand contract to supply the jets.

Tlali would also not be drawn on the Scorpions' investigation into Bredenkamp, a Hlongwane associate whose firm is alleged to have received at least £20 million in unexplained payments from BAe between 2003 and 2005.

"It is really too early for us to say whether someone is or isn't a suspect in this investigation… The outcome will tell us if we are going to charge anyone in connection with the alleged offences," Tlali said.

The SFO reportedly raided Bredenkamp's British properties nearly two years ago as part of a long-running investigation into BAe's 1999 aircraft sales to South Africa.

On Tuesday, US Department of the Treasury designated Bredenkamp an "insider" who had financially propped up Mugabe's regime.

Attorney Ian Small-Smith, representing Bredenkamp, confirmed the Scorpions had raided his client's home in Sandhurst, Sandton yesterday, but said the unit's officials had left empty-handed.

The Cape Argus has established the search-and-seizure operations on the premises of Hlongwane and Bredenkamp, carried out at seven locations in Cape Town and Gauteng, were authorised by way of an order from Pretoria High Court Judge Edward Shongwe.

Small-Smith said he had not received any of the court documents which convinced Judge Shongwe to order the raid, and which are now being held in a safe at the Pretoria High Court.

Despite numerous attempts to reach Hlongwane or his staff at his offices in Illovo, Joburg, Cape Argus was unable to obtain comment from the businessman or his lawyers.

Hlongwane has yet to comment publicly on the SFO's queries about the "substantial payments" he allegedly received from BAe when he, it is believed, was in a position to influence who would be awarded South Africa's £1.5bn aircraft contract.

BAe won the deal even though the company charged nearly twice the price of a rival Italian bidder.

Questions were later raised after it emerged that Modise had changed the formula by which the winning bidder would be chosen, minimising the significance that the costs involved would play in the decision.

The SFO's investigation is focused on claims that Hlongwane received "substantial payments" from the successful bidding company (BAe).

According to a 2007 SFO request for mutual legal assistance to South Africa, BAe's own documentation revealed that Hlongwane had "entered into a general consultancy agreement with BAe *2 in 2002 on a retainer of £1m a year".

With acknowledgements to Karyn Maughan and Cape Argus.

*1       No need to be coy about that.

Here is his business card





*2      I think that there were consultancy agreements in place far before 2003, more like 1997.