Politicians, business leaders set to be named
South African politicians and businessmen who
pocketed R1-billion from the arms deal are set to be
named in a new investigation by Britain's auditing
watchdog.
The Accountancy and Actuarial Discipline Board (AADB)
is to investigate KPMG, which advised BAE Systems on
offshore companies that were used to pay "commissions"
to influence the awarding of lucrative contracts in
South Africa's R47.4-billion defence procurement
package.
Controversial businessman Fana Hlongwane, who was an
adviser to then-defence minister Joe Modise when the
arms deal was initiated, will be a key figure in the
latest probe.
It follows an investigation in the UK and Liechtenstein
into alleged payments of more than R200-million by BAE
to him.
The company, which has also been under investigation by
Britain's Serious Fraud Office (SFO) since 2007 for
issuing bribes in South
Africa *1, recently "
settled"
a £286-million fine for failing to comply with global
anti-bribery rules *2.
The board has initiated the latest probe after
corruption cases related to the arms deal were
mysteriously dropped *3
by South Africa's Hawks unit in September.
The audit, which will involve scrutiny of KPMG's
confidential records, is set to reveal substantial
financial evidence - and disclose the names of
influential individuals - who, in exchange for cash,
helped BAE supply Hawk trainer aircraft and Gripen
fighter jets to South Africa for $2.1-billion.
Independent Democrats leader Patricia de Lille said
yesterday she would also be approaching the board to
offer assistance, and would request a copy of its
findings.
De Lille this week lodged a formal complaint with the
public protector regarding the "politically motivated"
decision to close the local investigation into
corruption in the arms deal.
She is also pursuing a private prosecution of 28
"politically connected individuals" on whom she has
evidence of having unlawfully benefited from the
procurement programme.
Trade union federation Cosatu and the Democratic
Alliance also welcomed the news, describing it as an "
exciting
new development".
They urged the government to co-operate if requested and
to consider
re-opening
its investigation into the arms deal.
"As far as co-operation with foreign investigations is
concerned, these are matters best dealt with at
government-to-government level," said party spokesman
Brian Sokutu.
The board is investigating KPMG's audits between 1997
and 2007, relating to commissions paid by BAE to
third-party agents and outside companies in major arms
deals.
AADB spokesman Jonathan Labrey this week declined to
comment, other than to say that the investigation was
the result of the SFO's probe into BAE's practices in
South Africa.
The SFO obtained signed affidavits in 2008 regarding
bank statements which showed that the arms company paid
£115-million to advisers "to assist in the securing and
maintaining of the Hawk and Gripen contract" with South
Africa and other countries.
According to the AADB, "BAE set up a system of offshore,
anonymous companies to funnel payments around the world.
Two of them were in the British Virgin Islands tax
haven."
Among these is Red Diamond Trading, which was
investigated over a series of payments made through it,
including £70-million distributed to agents in SA.
In addition to these payments, the AADB said it would
probe KPMG's advice to BAE on the operation of offshore
companies, including Red Diamond Trading, Poseidon
Trading Investments and Novelmight.
The AADB declined to confirm whether it was
investigating Arstow, another offshore company set up by
BAE Systems, which paid out more than R53-million.
In March, the Sunday Times reported that allegations
contained in secret court documents, including a
106-page affidavit from deputy director of public
prosecutions Billy Downer, detailed how Hlongwane was
effectively paid £4.9-million between October 1999 and
July 2001 by Arstow.
Hlongwane could not be reached for comment despite
numerous attempts. Lindsay Walls, a spokesman for BAE,
declined to comment.
KPMG spokesman Gavin Houlgate said the company would be
"co-operating fully with the AADB".
David Maynier, the DA's defence and military spokesman
said: "The AADB investigation is an exciting new
development. It may provide
a way back into the arms
deal.
"We are in the process of applying for all documents
relating to the arms deal investigation."
Hawk's boss Anwar Dramat had told parliament in
September that it would cost too much to pursue the
investigation into corruption in the arms deal.
He said that there were 460 boxes of documents and 4.7
million computer- generated documents relating to the
arms deal in his possession.
On Friday, Hawks spokesman Colonel Lindela Mashingo
reiterated that the arms deal investigation was closed,
adding that his office was not aware of the latest
investigation.
Asked whether the Hawks would co-operate with the AABD
if it requested access to documents, Mashingo said: "Due
consideration will be given to assisting ... as and when
approached."
Standing Committee on Public Accounts chairman Themba
Godi yesterday said: "I have written to the Hawks
seeking a detailed explanation ... for their decision.
It is on the basis of their response that we will decide
on a way forward."
Related Articles
- naidoosu@sundaytimes.co.za
- laganparsadm@sundaytimes.co.za
With acknowledgements to
Subashni Naidoo, Monica Laganparsad
and Sunday Times.
*1 That's
what they did - no allegations - just fact.
For that is the way this juristic criminal goes about
doing its business.
It is a business model founded on corruption.
*2 This is a whopping fine.
But it is not anything to do with the South African Arms
Deal.
The reason is that, although there was so much and so
much stronger evidence in the South African leg, BAe
will not admit to anything because it goes right up to
the top, right up to Nelson Mandela, Thabo Mbeki (who
was effectively just the runner), John Major and Tony
Blair.
I was told face to face in his office in early 2000 by
the main commissions agent in this deal, the late
Richard Charter that the deal was done by then deputy
president Thabo Mbeki and then prime minister John
Major, in 1995 in a classic smokey room deal. This was
over two whole years before the SA Government issued the
Request for Information (RFO) in September 1997 and
three years before the Request for Offer (RFO) circa
February 1998.
So this was a done deal from the very onset.
Indeed I was also told by Charter that he through his
company Osprey Aviation was keeping the embers of
patriotic acquisition glowing for BAe in those cold
apartheid sanctions days. BAe was just waiting in the
wings for a change in government (which is one of its
classic tactics.
So this R30 billion deal, for aircraft the SAAF didn't
want nor need and the country cannot afford, was
conjured up to divert South African taxpayers
hard-earned monies into the greed pays of British and
Swedish corrupters and South African elite corruptees.
This is larceny on the grandest of scales.
Any to make it a million times worse that pure simple
corruption, it was designed to fund a political party
into governing office and keep it there until until out
great grandchildren are very old people.
*3 There's nothing mysterious about
this - it's simple gatekeeping by the deployed cadres
Simelane and Dramat to protect the futures of their
principles Zuma, Mbeki et al out of the penitentiary.
It's about as sick as its gets.
And what about Thyssen where the corrupted NPA and SAPS
actually has the bribe document in their grubbiest of
paws.
The smokiest of fingerprinted, red hot smoking guns with
black powder all over the perpetrators' weasel faces.
It just got sicker.