Moeletsi Mbeki was an early beneficiary of the black economic empowerment policy he now criticises, ironically because of the military expertise built up under the apartheid state and then sold off cheaply by firms wanting to distance themselves from its legacy.

In July 2001, the Mail & Guardian reported that Mbeki was a partner in a company poised to buy into Vickers-OMC, formerly Reumech-OMC, the South African company responsible for designing and building some of the country’s most effective armoured vehicles, including the mine-protected Nyala, the Rooikat and the Olifant tank.

In mid-1999, Reumech-OMC had been sold by the South African defence conglomerate Reunert to the British defence company Vickers for R120-million, reportedly with the proviso that Vickers bring on board an empowerment partner.

By that stage it was known that the government had decided not to go ahead with the acquisition of new battle tanks, which were part of the original arms deal procurement proposals but had fallen by the wayside because of the overall cost of the defence acquisition programme.

Mbeki and the former Armscor chairperson and ANC KwaZulu-Natal treasurer, Diliza Mji, put together a bid for 25% of the South African company.

When Mbeki’s involvement became public in 2001 it was controversial, because Vickers-OMC stood to benefit directly from the arms deal because of its ownership of the South African company, Gear Ratio, which was part of a bid to supply gear boxes for the four new corvettes bought by the navy.

Controversy
The M&G revealed that a committee chaired by the department of defence’s chief of procurement, Chippy Shaik, had overturned a technical preference for a competing foreign supplier because of the strategic need to support Gear Ratio.

The deal was also controversial because it was part-funded by a loan to Mji by the Industrial Development Corporation while he was its chairperson. Mji applied for the loan before being appointed chairperson.

The deal with Vickers was finally signed in March 2002, giving Mbeki, Mji and another shareholder, Khapametsi Maleke, 25% of the company for just R25-million.

By that stage, the 9/11 attacks had taken place, the invasion of Afghanistan was in full swing and the invasion of Iraq was on the horizon. The South African armoured vehicle manufacturer was perfectly positioned to profit from the West’s engagement in several wars against insurgents for whom mine and projectile attacks against convoys and patrol vehicles was a major tactic.

Vickers was taken over by another British firm, Alvis plc, in August 2002 and finally by BAE Systems in 2004. Exports from what is now known as BAE Systems Land Systems South Africa have grown dramatically.

A 2007 article quoted the company as saying that since BAE Systems bought a major share in the company in 2004, Land Systems South Africa’s annual turnover has quadrupled from R300-million to more than R1.2-billion in 2006. A 2009 article quoted the company as saying exports had totalled about R4.34-billion since 2003.

With acknowledgement to Sam Sole and Mail & Guardian.