BAE set up a system of offshore, anonymous companies to funnel payments around the world

THE Seriti commission faces a new challenge when South African companies, businessmen and politicians who allegedly pocketed bribes in the arms deal are named in a report expected to be released soon.

The commission was appointed by President Jacob Zuma to investigate the R70-billion arms deal, but it has so far indicated that there is no evidence implicating the ANC in corruption.

The new report on the deal is being completed by Britain’s auditing watchdog, the Financial Reporting Council. It looked into advice given by financial services firm KPMG to BAE Systems, which supplied fighter jets.

The report is expected to reveal which offshore companies were used to pay commissions.

The council investigation, according to British officials, is being finalised and a forensic report could be released within weeks.

Council spokesman Peter Timberlake said: “As a regulator, the Financial Reporting Council follows a process, which means we announce when investigations are initiated and when they conclude.”

The audit, which examined KPMG’s confidential records, is expected to disclose the names of influential individuals who helped BAE in exchange for cash.

William Baloyi, spokesman for the Seriti commission, said it was not aware of the details of the investigation.

He was asked whether the commission would summon any ANC politicians and businessmen expected to be named in the report to its hearings on August 5.

“[We] will only comment if and when their report or findings are released. Needless to say, it will be of interest to us and we will be keenly awaiting the outcome,” said Baloyi.

In March, the Sunday Times reported that the commission had decided to give the ANC and its leaders, believed to be the main benefactors of the arms deal, a free pass without interrogating any party officials or examining its bank accounts.

A letter by the commission’s chairman, Judge Willie Seriti, dated February 26 2013, said “no evidence implicating the ANC has been brought to the attention of the commission”.

He added: “Should such evidence come to light, the commission will deal with the matter as it deems appropriate.”

Captain Paul Ramaloko, a spokesman for the Directorate for Priority Crime Investigation, known as the Hawks, said: “Only the Seriti commission is communicating on this. We are not commenting at this stage.”

In September 2010, Hawks boss Anwar Dramat told parliament that it would cost too much to pursue the investigation into corruption in the arms deal.

He said there were 460 boxes of documents and 4.7 million computer-generated documents relating to the arms deal in his possession.

David Maynier, the DA’s defence spokesman, said the findings by the council may shed light on front companies used by BAE to channel secret payments to South Africa.

In 2010, the council began scrutinising KPMG’s audits between 1997 and 2007 relating to commissions paid by BAE to third-party agents and outside companies in major arms deals. KPMG did not respond to requests for comment.

According to the council investigation, “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 those was Red Diamond Trading, which was investigated over a series of payments made through it, including money distributed to agents in South Africa. It also investigated Poseidon Trading Investments and Novelmight.

With acknowledgement to Suthentira Govender, Matthew Savides and Sunday Times.