Publication: Mail and Guardian Issued: Date: 2002-07-30 Reporter: Sapa Editor:

‘Embarrassed' Woerfel Says Yengeni Asked for Discount


Publication  Mail & Guardian
Date 2002-07-30
Reporter Sapa
Web Link


Former African National Congress (ANC) chief whip Tony Yengeni asked Michael Woerfel to get him a luxury car at a 50% discount, the businessman said on Friday.

He was embarrassed by the request but acceded, Woerfel said in a statement submitted to Pretoria's Commercial Crimes Court.

He did not want to disturb his good relationship with Yengeni by refusing.

After making enquiries, he told Yengeni the vehicle - a Mercedes Benz ML 320A - could be obtained for about R310 000, lower than the retail price of R349 950.

He had expected Yengeni to accept this was the price at which the car would be provided, Woerfel said.

"However, (Yengeni) asked for a very significant discount and in fact asked to acquire the vehicle at half the retail price."

He then made arrangements in terms of his marketing budget, which allowed him to sell a vehicle at a loss, Woerfel said. He reasoned it would be good for the image of Daimler-Benz if a prominent government member was seen driving the car.

"The discount was not particularly significant within the marketing budget," Woerfel's statement read.

"The amount of the discount was a relatively small figure ... when compared to the kind of marketing expense incurred by (Daimler-Benz) in, for example, sending entire parties of people (government and quasi-government) to international exhibitions and manufacturing plants."

Woerfel denied the discount was given with the intent to influence Yengeni in any way. The two men on Friday pleaded not guilty to corruption and fraud charges.

This followed a ruling in the morning by magistrate Bill Moyses dismissing an application by Yengeni for further particulars from the State on the charges against him.

Yengeni faces a charge of corruption for allegedly buying the Mercedes at a 47% discount in return for using his influence to "market" the products of Daimler-Benz Aerospace AG or Daimler-Benz Aerospace SA.

He faces an alternative count of fraud for failing to disclose the benefit to Parliament.

Woerfel, then head of Daimler-Benz's Pretoria representative office, is charged with corruption for allegedly arranging the deal.

Daimler-Benz was the manufacturer of the AT2000 - which was at the time being considered with two other aircraft in South Africa's search for an advanced light fighter aircraft in terms of the arms acquisition process.

Both men face a charge of fraud for alleged false representations made in the agreement of sale drawn up for the car deal. Yengeni also submitted a statement to the court on Friday in which he admitted receiving a discount but said he had no corrupt intent.

The politician said he was not asked to commit any act in his capacity as a member of Parliament or as chairman of the joint standing committee of defence (JSCD), nor did he undertake to do so.

He was not asked to further the interests of Woerfel's company nor did he intend to. Yengeni said he was unable to affect the outcome of the arms acquisition process and never suggested that he could. Woerfel said he knew the JSCD played no role in the arms acquisition decision-making process.

"Any allegation and/or perception that (Yengeni) could have played a role in influencing such decision-making process is a wrong one."

In fact, Woerfel said, he not only invited Yengeni but also other prominent government members to attend airshows and exhibitions and visit manufacturing plants in Europe and South America.

"This is a marketing practice common to all similar international companies."

In relation to the alternative fraud charge, Yengeni contended he had no duty to disclose the benefit to Parliament as a code of conduct governing such matters was never adopted.

He also maintained he was immune from prosecution on this charge by virtue of parliamentary privilege, and argued it was legally not possible to defraud Parliament.

On the charge related to the agreement of sale, Yengeni said he was not involved in the preparation of the document, and signed it without perusing it.

His signing of the document did not prejudice Daimler-Benz as the company itself had compiled the agreement. Woerfel also denied his company suffered any prejudice.

The sales agreement explained the discount by falsely stating the car had been damaged in transport and did not come with a warranty. It also reflected a R50 000 deposit which was never paid.

This was done because Mercedes Benz Finance's financial general manager Franz Koller insisted on an explanation for company records. Woerfel said an internal audit found no fraud or irregularity.

"In fact ... there is no complainant, except for the State, who in this regard complain alone and wrongly."

The trial was postponed to next year - staggered over three months. Moyses ruled that the trial be conducted from January 16 to 23, February 11 to 21, and March 19 to 25.

The trial was initially set down from July 9 to Friday, but was delayed by extensive legal wrangling over the charge sheet - which the defence contended did not disclose an offence.

With acknowledgements to Sapa and Mail & Guardian.