Publication: Independent Online Issued: Date: 2001-01-08 Reporter: Sapa Editor:

R2bn Damages Suit Looms Over Armscor

Publication  Independent Online
Date 2001-01-08
Reporter Sapa
Web Link

Top Armscor officials are likely to meet in Gauteng 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 United States businessmen had given a local attorney a brief to launch the suit after a failed $28-million  deal to buy nine redundant C160 Transall transport aircraft from SA Air Force surplus. Roy Segers and Richard Parker claimed the deal may have been stymied because the former minister of defence, Joe Modise, and Ron Haywood, the Armscor chair, wanted to put together their own deal to buy the planes. Both Modise and Haywood vehemently denied the claims. 

'The planes were no longer for sale - on Modise's orders' 

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 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 met a group of 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.

The aircraft have been bleaching in the sun for the past four years Haywood this week emphatically denied being involved in any attempt to buy the aircraft.

Armscor's Bertus Cilliers said on Sunday that roleplayers, including Haywood, Van Staden and Armscor's chief executive officer, Sipho Thomo, would meet soon 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 South Africa's leading defence manufacturer until 1992, and is now a procurement and disposal agency within the defence ministry.

As a disposal agency, it is responsible for getting rid of old or surplus  ational Defence Force stock.  It was also intimately involved in the negotiations that led to the  country's controversial R43-billion arms acquisition programme.

Sam Mkhwanazi, the spokesperson for Defence Minister Mosiuoa Lekota, said Lekota was still on leave. It was likely he would look into the matter once he was back at his office on Monday.

Modise has gone into the defence business since stepping down as defence minister at the end of President Nelson Mandela's administration.

He is the chairperson of Marvotech, a company that advertised itself at last year's Africa Aerospace and Defence show at Waterkloof air force base 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.

It planned to upgrade older western and Russian defence equipment on the continent with modern Russian technology - a potentially lucrative business. 

The Transall aircraft are believed to be still at Waterkloof - where they have been bleaching in the sun for at least the past 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 this 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 buy the aircraft. 

The newspaper said questions surrounded this deal, too. - Sapa 

With acknowledgement to Sapa and Independent Online.