In a new twist to the R43-billion arms-procurement deal, DaimlerChrysler distanced itself on Tuesday from the European Aeronautic Defence and Space Company (EADS), which has admitted it facilitated special deals on Mercedes-Benz vehicles to at least 30 prominent South Africans.

The company said after its international advisory board meeting in Cape Town that an "internal investigation" by Daimler into the company's record of sales of vehicles to EADS revealed "no connection" to the arms deal.

Daimler, which manufactures Mercedes-Benz vehicles, is a shareholder in EADS, a Dutch-owned company. However, Daimler's advisory board chairperson, Victor Halberstadt, said it was not a majority shareholder in EADS and had no control over the company's sale of vehicles to third parties.

The company met EADS at its head office recently

He said the relationship between Daimler and EADS's involvement in the multibillion-rand arms deal had been "misunderstood" by perceptions of a link between the two companies in the media.

Daimler designed, manufactured and sold its product. "What happens beyond the sale is not something Daimler would get involved in. We have no knowledge of the involvement of our client company in South Africa in the sale of our product to South Africans," he said.

EADS has not revealed the names of the South Africans who allegedly acquired vehicles, but admitted that it provided African National Congress chief whip Tony Yengeni with a 4x4 Mercedes-Benz while he was chairperson of parliament's joint committee on defence.

At the press briefing on Tuesday, Daimler's SA spokesperson, Lulama Chakela, confirmed that the company met EADS at its head office recently to discuss the effect of EADS's involvement in the arms deal on Daimler's market image.

"Technically, there's nothing we can do about the negative image EADS's involvement has had on Daimler. We are not a majority shareholder and it's up to EADS to act on the matter," she said.

Asked why Daimler had invited President Thabo Mbeki to its board meeting on Tuesday in light of the arms probe, Halberstadt said the matter did not "pop up in the board meeting".

He rejected media suggestions that Mbeki's non-attendance was a snub to DaimlerChrysler.  

With acknowledgment to Malcolm Ray and Independent Online.