Africa Confidential

London (Africa Confidential) - Investigators are probing multimillion pound payments from Britain through secret accounts to a key ally of President Robert Mugabe and Minister Emmerson Mnangagwa.

Britain's BAE Systems, the world's fourth biggest arms company, has paid over £25 million (US$49.5 million) to a company whose majority Zimbabwean shareholder is a long-time business ally of President Mugabe's regime. The multiple investigations into BAE's role in the affair, which appear to be nearing conclusion, are likely to have serious political repercussions in Britain and South Africa.

The recipient of the payments was British Virgin Islands-registered Kayswell Services, whose signatories include majority shareholder John Bredenkamp, Jules Pelissier and Graham Andrews, according to company records seen by Africa Confidential. BAE made the payments in mid-2003 through its Red Diamond Trading subsidiary, also registered in the British Virgin Islands. Within a year, Kayswell had transferred more than £10 million to Bredenkamp.

Through his network of military equipment companies, such as Aviation Consulting Services and Raceview, Bredenkamp became an important supplier to the Zimbabwe Defence Force and a close associate of Emmerson Mnangagwa, the chairman of the Joint Operation Command. Bredenkamp has indefinite leave to remain in Britain. ACS, which is registered in both Britain and Zimbabwe, was the Southern African agent for BAE and Italy's Agusta military aviation company.

However, Bredenkamp's spokesman said his client had not 'to the best of my knowledge supplied military equipment to the Zimbabwe government since European Union sanctions were introduced (in February 2002).' BAE's payments to its agents are being investigated in several jurisdictions. Richard Alderman, the Director of Britain's Serious Fraud Office, which has been under fire since it halted an investigation into a BAE arms deal with Saudi Arabia, pledged on 30 July to reinforce efforts to conclude its investigations into BAE's £1.6 billion deal with South Africa. Bredenkamp denies he played any role in the BAE arms deal, but SFO and Ministry of Defence officials raided his offices in Berkshire in October 2006.

Asked about why BAE had paid Kayswell over £25 million, Bredenkamp's spokesman said 'it would be inappropriate to comment while the investigation is continuing.' A spokesman for BAE also declined to comment on matters that were 'commercially sensitive'.

BAE's £1.6 billion arms deal with South Africa, under which it is to supply 24 Hawk fighter trainers and 26 Gripen advanced light fighters, will come under more scrutiny after recent progress in the investigations. Until now President Thabo Mbeki has resisted pressure to open a probe into the entire arms deal. South African investigators have focused on the Thales deal, to which Mbeki's rival Jacob Zuma is linked. Now the African National Congress is pressing for a full investigation.

Mbeki chaired the ministerial committee in 1997-98 that controlled the evaluation of bids in the arms deal. It was Mbeki and his ministers who decided to accept the deal despite opposition from the heads of the armed forces, who argued that the BAE planes were too expensive and did not meet the SA Air Force's technical requirements. The then Chief of Air Staff, General W. H. Hechter, said he would only accept the BAE Hawks if 'politically obliged' to do so.

A spokesman for John Bredenkamp contacted Africa Confidential on the morning of 31 July and wanted to the make the following points: 'Mr Bredenkamp was not personally involved with the BAE Systems deal in South Africa. He knows nobody who was on the BAE Systems side of the deal in South Africa. And likewise Mr Bredenkamp doesn't know anyone on the South African government side of the deal.' *1

The spokesman also confirmed that Mr Bredenkamp remains happy to cooperate fully with the British SFO's investigations into the commissions paid on BAE's £1.6 billion arms deal with South Africa.

With acknowledgements to The Zimbabwe Times.