Prominent figures in South Africa's multi-billion rand arms deal were on Monday accused of misrepresenting facts related to the process to procure the strategic defence package.

They included head of acquisition in the Defence Department Chippy Shaik, former Corvette programme manager Frits Nortje, and Corvette project officer Johnny Kamerman who has since been promoted to Rear-Admiral.

The allegations were made in Pretoria by Communications Computer Intelligence Integration Systems (CCII) managing director Richard Young, the first witness outside government to testify in the public hearings into South Africa's arms deal.

He also disputed earlier testimony heard by the presiding panel in several respects.

It was, for example, difficult to believe evidence by Cabinet ministers that the government had nothing to do with the awarding of subcontracts, Young said.

He contends there were irregularities in the awarding of a R40-million tender for information management systems (IMS) used in the four Corvette ships South Africa bought under the arms package.

CCII, a Cape Town-based defence information technology company, was named the preferred supplier of these systems, Young claims. The tender was, however, later awarded to French company Detexis.

Detexis is the sister company of African Defence Systems (ADS), of which arms acquisition head Chippy Shaik's brother, Schabir, is a shareholder and director.

Young on Monday said Chippy Shaik misrepresented facts when he told Parliament's public accounts committee (Scopa) that CCII had acknowledged its systems needed further development.

Shaik also erred when told the committee that CCII's IMS was a "unique technology" and "that in fact it is a technology and not a product".

Young told the panel: "This statement misrepresents the true facts.

The IMS consists almost entirely of an integrated set of commercial off-the-shelf products."

Shaik furthermore told Scopa that CCII had been asked for a performance guarantee but refused to do so.

"This is completely untrue," Young testified. "We were never asked for such a guarantee, either verbally or in writing."

Young also questioned replies by Kamerman to the same committee last year while being questioned about price audits.

"Captain Kamerman's responses to the simple question of price audits undertaken by himself were incorrect."

Young contended there were fundamental flaws in the process by which Detexis was awarded the contract CCII was vying for. This emerged from a document prepared by Armscor that came to his attention in April this year.

It was a report by technical experts evaluating the CCII product.

"The report cites 15 reasons why the CCII system should be retained and only six negatives, most of which are not true," Young said.

The experts also recognised the CCII system as the superior one.

Yet, in his report on the matter to Armscor chief executive Sipho Thomo, Nortje recommended the Detexis product.

"I contend that Mr Nortje's report misrepresents the facts, findings and final recommendation of the evaluation team. In fact, the report in effect overturns a recommendation of the technical experts," Young said.

On the awarding of subcontracts, he said: "I find it difficult to accept that the South African government repeatedly denies it had anything to do with the sub-contracting for these defence acquisition contracts, specifically the Corvettes."

Earlier, Young testified that South African companies developing electronic sub-systems for mainly corvettes at their own cost were guaranteed contracts if and when the vessels were purchased.

Nortje clearly stated in 1998 that the State would not be able to fully support research by the local defence industry for the next two financial years.

He said local companies would have to use their own money for such research, which CCII did.

"What was said... was that the State could not guarantee that the contractors who took such risks would eventually receive the contract because they could not guarantee that the Corvette programme would eventually materialise," Young said.

"However, it was said that if and when the Corvette acquisitions were finally approved, then these contractors who had taken risks in developing their elements would be guaranteed their part of the contract."

The hearings were delayed in the morning by legal wrangling after Adam Pitman, for Young, complained that ADS had threatened his client with legal action with regard to his testimony.

Proceedings continued after lawyers for the two sides agreed that Young's evidence was unlikely to prejudice ADS.

Young's testimony - in parts of a highly technical nature - comprises a typed document of more than 70 pages. He was about halfway through when the hearings were adjourned until Tuesday.

With acknowledgements to Sapa.