Publication: Business Day Issued: Date: 2001-03-14 Reporter: Editor: Farouk Chothia

Shaik Alleged to have had Key Role

Publication  Business Day
Date 2001-03-14
Editor Farouk Chothia
Web Link

Arms contractor's letter refers to him supervising' selection of combat suite  

DEFENCE department arms acquisitions chief Chippy Shaik played a key role in the selection of subcontractors for government's arms purchase, according to a letter written by a main contractor.  

The letter raises further questions about government's refusal to accept responsibility for subcontracts, although it acknowledges there was contact with subcontractors.  

African Defence Systems (ADS) CEO Pierre Moynot wrote to the attorneys of CI Systems in July 1999 that the selection process for the corvette combat suite was being done under the "supervision" of Shaik. ADS is owned by French company Thomson-CSF. One of the directors of the company is Shaik's brother, Shabir Shaik. CI Systems was bidding for subcontracts. ADS won the main contract for the combat suite.  

Addressing concerns raised by CI Systems, Moynot wrote: "I must stress that I have been quite surprised by the noise made by your client around this selection process that was entirely between the hands of the project team (composed of representatives of Armscor and the SA Navy) under the supervision of the director of acquisition from the secretariat of defence."  

CI Systems MD Richard Young yesterday suggested that Moynot's comments contradicted those that Shaik made to the parliamentary public accounts committee last year.  

Shaik said that he had disclosed his conflict of interest with regard to ADS, and he recused himself from "any particular decision relating to the combat suite". Skaik's office referred questions to the department's communications section, which said it would respond today.  

Moynot said that while Shaik might have made "comments" related to the subcontracts, he was not involved in direct negotiations and decision-making.  

Government ministers Alec Erwin, Trevor Manuel, Mosiuoa Lekota and Jeff Radebe said in a statement in January that "procurement does not deal" with subcontractors, and to "insist that the government must be held to account for minor subcontracts is to misunderstand procurement". Erwin's spokesman, Edwin Smith, said government had never claimed there was "no interaction with subcontractors". But the fact that government and subcontractors interacted over issues such as specifications did not mean that government chose subcontractors.  

Democratic Alliance public accounts committee member Raenette Taljaard said that government was trying to build a "Chinese wall" between interaction with subcontractors and the fact that contracts were not signed with them but with main contractors.  

Meanwhile, the committee will meet today to discuss the tabling of another report to Parliament on the arms deal. The committee will have to formulate a response to the attack the four ministers and Deputy President Jacob Zuma launched on it after it called for the Heath unit to be part of the probe into the arms deal. 

With acknowledgement to Farouk Chothia and Business Day.