A South African arms deal company could sue the government for between R100-m and R200-m in damages unless given the lucrative arms deal contract it claims it was promised, then unfairly denied, the arms deal hearing was told yesterday.

Communications Computer Intelligence Integration (CCII) Systems MD, Dr Richard Young, was holding off on legal action pending the outcome of the joint investigation into the multi-million rand arms deal by the Public Protector, Auditor-General and National Director of Public Prosecutions.

His company lost its R38-million bid to supply an information management system (IMS) for the corvette combat suite, a contract he has alleged Armscor guaranteed when it became clear in the early 1990's that South African companies would have to put up their own cash to develop combat suite components.

Under questioning yesterday, Dr Young conceded that Armscor pumped R20-m into development of an IMS infrastructure under a contract with his former employer.

He also rejected a suggestion that he had been soliciting contracts for CCII while ostensibly using the until then dormant company as a front for an Armscor project he presented in London on behalf of his former employer shortly before his resignation.

Dr Young was questioned yesterday by council for African Defence Systems, Department of Defence Chief of Acquisitions, Chippy Shaikh, the German Frigate Consortium, Armscor former CEO, Llewellyn Swan, and Armscor.

He mentioned that minutes proved Mr Shaikh had not absented himself from all corvette deal deliberations and participated in at least one meeting although he had previously declared a possible conflict.

Told that an Armscor official would deny informing him that the recusal was a farce, Dr Young responded that words to this effect were stated in a face-to face meeting in the official's office.

With acknowledgements to Carol Hills and The Citizen.