National prosecutions boss Menzi Simelane on Tuesday insisted a lack of evidence prompted him to call off attempts to freeze the foreign assets of businessman Fana Hlongwane as part of the arms deal investigation.

He said hundreds of pages of reportedly incontrovertible evidence against the former advisor to late defence minister Joe Modise turned out to be "not so clear-cut" on closer inspection.

Simelane said he had demanded that the Asset Forfeiture Unit hand him the evidence based on which it was seeking a finalisation of a preservation order freezing Hlongwane's assets in the tax haven of Lichtenstein.

An initial order was granted by the High Court in Pretoria on March 5.

It effectively froze nearly half-a-million pounds sterling held in a trust in Lichtenstein's Bank Pasche for Hlongwane, based on the suspicion that the money was linked to bribes paid in South Africa's long-running arms deal scandal.

The preservation order was provisional and had to be followed up within 90 days with a final forfeiture application. The case was meant to go back to court in early April.

Simelane said he met the Asset Forfeiture Unit before this month's court date and argued against entrenching the preservation order.

Instead, he suggested that the unit secure an undertaking that Hlongwane would not spend the money.

"We then agreed that no, what we will do is remove the preservation order but you will make undertakings that you won't touch the money. We agreed, but then I said to them I still want the documents."

"So they submitted the documents and we looked at it and we said look what's the point of purely withdrawing the preservation order as agreed when on the evidence we can actually see it is not as clear-cut as we thought it was."

"We don't want an undertaking that they necessarily won't touch the money, so for me it is not material and we left it at that."

He was speaking after a briefing to Parliament's portfolio committee on justice on the strategic plan of the National Prosecuting Authority (NPA).

Opposition MPs tried to grill Simelane on the decision, but acting chairman Mondli Gugumbele repeatedly objected, saying the issue was not on the agenda.

Simelane, the former director general of justice, had in the past been perceived as frustrating local investors' attempts to co-operate with foreign counterparts probing arms trade corruption.

This stemmed from his objections that raids on Hlongwane by the now defunct Directorate of Special Operations (DSO), or Scorpions, might be unlawful.

Lichtenstein prosecutors who had probed Hlongwane for years reportedly wrote to the NPA in 2008 claiming that assets belonging to the South African were believed to be linked to bribery and corruption by British defence company BAE.

BAE was this year fined nearly $450 million in America and the UK for failing to comply with global anti-bribery rules.

The Scorpions suspected BAE did not play by the rules when it won a deal to supply Hawk trainer aircraft and Gripen fighter jets to SA for US2.1 billion, but paid about R1 billion in "commissions" to secure the contract.

Simelane's decision not to pursue the freezing of Hlongwane's assets was cast by newspapers as a death knell for investigations into corruption surrounding the country's arms buying spree in the late 1990s.

But the new national director of public prosecutions said the investigation was ongoing and therefore the sub judice rule prevented him from commenting further.

He said there was however no trial-ready case before him, and linked this to the transfer of all the full caseloads of the Scorpions, whose brief included the arms deal, to the recently established Hawks.

"The substance of the overall matters remains alive. As far a we know it is there. There is nothing before me to consider so in a sense I can't do much."

"An indictment or charges... has never been there. By the time the DSO was disbanded they had not reached a stage where they could do it."

"All investigations are now going to the Hawks, it is being transferred with many others so we will wait for the Hawks to come back and tell us what they need from us."

The Hawks report to the police, unlike the DSO, which formed part of the NPA. - Sapa

With acknowledgements to Sapa and Business Report.