Publication: Sunday Times Issued: Date: 2001-01-07 Reporter: Sapa Editor:

Armscor Checking Facts Before Commenting on Looming Lawsuit

Publication  Sunday Times
Date 2001-01-07
Reporter Sapa
Web Link

Top Armscor officials are likely to meet in Pretoria on Monday to discuss reports of a $312-million (about R2-billion) damages suit against the state armaments agency.

This follows reports on Sunday that two disgruntled US businessmen had given a local attorney a brief to launch the suit after a failed $28-million deal to purchase nine redundant C160 Transall transport aircraft from SA Air Force surplus.

The Sunday Independent reported that Roy Segers and Richard Parker claimed the deal may have been stymied because former Minister of Defence Joe Modise, and Ron Haywood, the current chairman of Armscor, wanted to put together their own deal to purchase the planes.

Both Modise and Haywood vehemently denied the claims, the paper said.

Modise also said the allegations were part of a smear campaign against him and other senior African National Congress figures.

Segers and Parker alleged that in September 1998 they were about to then pay $28-million for the French-built aircraft when they were told by a Boet van Staden that the planes were no longer for sale — on Modise’s orders.

The Sunday Independent said Segers and Parker continued to negotiate with Armscor to try to reinstate the deal.

Some months later, after Modise had retired as minister, the two Americans were meeting financiers Incentive Corporate Finance to secure funding on another deal.

They were surprised to be told that Modise and Haywood had just approached the same institution seeking to raise capital to buy, refit and refurbish the C160s, the paper said.

Haywood this week emphatically denied being involved in any attempt to purchase the aircraft.

Armscor spokesman Bertus Cilliers on Sunday said roleplayers, including Haywood, van Staden and Armscor chief executive officer Sipho Thomo, would soon meet to discuss the matter.

He said the allegations were serious and no comment could be made until all the facts had been established.

Armscor, was until 1992 South Africa’s leading defence manufacturer, and is now a procurement and disposal agency within the Ministry of Defence. 

In the latter role it is responsible for disposing of old or surplus SA National Defence Force stock. It was also intimately involved in the negotiations that led to the country’s controversial R43-billion arms acquisition programme. 

Defence minister Mosiuoa Lekota’s spokesman, Sam Mkhwanazi, said the minister was still on leave. It was likely he would look into the matter once he was back at his office on Monday. 

Modise, meanwhile, has gone into the defence business since stepping down as defence minister at the end of President Nelson Mandela’s administration. He is currently chairman of Marvotech, a company which at last year’s Africa Aerospace and Defence show at Waterkloof Air Force Base, advertised itself as a bridge between local and Russian defence companies.

Marvotech, part of Russia’s Marvol Group, had links with that country’s industry as well as with Armscor and a string of South African aerospace companies and planned to upgrade older western and Russian defence equipment on the continent with modern Russian technology — a potentially lucrative business. The Transall aircraft are still believed to be at Waterkloof — where they have been bleaching in the sun for at least the last four years.

One of the aircraft was on exhibit at the SA Air Force museum. The aircraft were withdrawn from use in the late 1980s after South Africa’s withdrawal from Namibia signalled a succession of defence budget cuts. There have been numerous calls for the aircraft to be returned to SAAF service, but the military said that would be too expensive.

Jack Hajibey, Segers and Parker’s attorney, said he would serve summons when the courts resumed later this month. 

Meanwhile, the Sunday Independent reported that a British company had won a tender, put out in May, to purchase the aircraft. The paper said questions surrounded this deal too. - Sapa

With acknowledgement to Sapa and the Sunday Times.