Mbeki took R30-million and gave some to Zuma

High and Dry: The SAS Manthatisi at a dry dock in Simon's Town. The submarine encountered problems as early as 2006, on its maiden voyage from the shipyard in Germany to South Africa.

The Billion-Rand Dud : Secret report fingers both men in arms-deal bribes

President Thabo Mbeki is alleged to have received R30-million from a German industrial giant to ensure it won the submarine contract in democratic South Africa's first arms deal.

He allegedly gave R28-million to the ANC and R2-million to former deputy president Jacob Zuma. This shocking allegation has surfaced for the first time in a highly secretive investigation by a UK-based specialist risk consultancy.

The cloak-and-dagger world of big business, greedy opportunists, dodgy dealings, outrageous promises, explosive reports and expensive gifts ... the Sunday Times encountered them all in a six-month investigation into the submarine deal. We interviewed arms dealers, military experts, economists, politicians, lawyers, industrialists and academics, and scoured highly confidential reports.

We also uncovered the suspect practices that helped favour the German company during the fiercely fought bidding war, including the irregular practice of using correcting fluid to alter documents.

We further reveal warnings in several authoritative reports at the time that the exorbitant cost of the deal could severely impact on the economy and that South Africa could ill afford to pay billions for weapons it did not need. Mbeki brushed these aside.

In another twist, we found that the first of the three submarines has spent most of the past six months out of the water, plagued by serious defects, and that the navy has neither the money nor the resources to run the vessels.

For more sensational allegations, read the Sunday Times again next week.

Secret report fingers both men in arms-deal bribes

Mbeki took R30-million and gave some to Zuma

Six-month Sunday Times investigation reveals:

A bit of Tipp-Ex helped Germans clinch winning bid

Mbeki ignored warnings country could not afford deal

First of navy's three new submarines has serious defects

New navy deal now on cards for arms we should have bought in the first place

With acknowledgements to Megan Power, Jocelyn Maker and the Sunday Times.