Publication: Noseweek Issued: Date: 2003-11-01 Reporter:

Arms Steal




Date November 2003, Issue 51

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A dispute over a navy contract turned nasty when heavies from one supplier raided the other and made off with delicate radar consoles - on the back of two bakkies.

Some South African defence contractors have been spending too much time at their computers playing war games. Last month the bosses of Reutech Radar Systems, based in Stellenbosch, sent a team of heavies to pull a surprise dawn raid on defence technology supplier, CCII in Cape Town. The two companies have had some minor differences about a contract to supply radar systems for the navy's soon to arrive new corvettes.

Seven burly men from Reutech gained entry to CCII's premises under false pretences and before most of CCII's staff had arrived for work. They then simply marched in, grabbed sensitive radar control equipment worth millions from a CCII workshop, and made their getaway in two bakkies that managed to scrape past a car that tried to block their way.

The CCII receptionist described the men as "balding, chubby, middle-aged Afrikaans-speaking executives in business clothes". They had initially told her and a colleague they were coming to drop something off, but once they had access to the offices, they loaded up their loot and carried it off, leaving the staff of CCII gasping.

More than a year ago, CCII - the company belonging to controversial defence electronics whiz Dr Richard Young - was contracted to manufacture a device called a "tracking radar console" for Reutech Radar Systems (RRS). Tracking Radar is used on a warship to track the precise position, range and speed of a potential target. The console is the display that a radar operator monitors. In terms of the agreement between Reutech and CCII, the consoles were first to be set up to work with test equipment, supplied by Reutech, which would mimic the input of their radar systems. The actual radar system could not be supplied to CCII for the tests as deadlines were tight and Reutech would not have completed it by the time the consoles were to be delivered.

CCII say they had the consoles working perfectly with the test equipment. However when they were eventually tested with the actual radar, it was found that there were a small number of deficiencies. According to CCII, this is normal with initial integration with a radar.

Reutech then asked CCII to correct these deficiencies, as well as redesign some other aspects of the consoles at no extra cost - a process that would have seen CCII lose hundreds of thousands of rands. CCII agreed to undertake the corrections, but in terms of a settlement agreement Reutech must pay CCII for the work - which has been ongoing since March this year.

It seems RRS, stressed by approaching deadlines and escalating costs, may have lost its cool. According to Young, he is still owed R12m by RRS and was holding the radar consoles against payment.

Young is no stranger to trouble and has proved himself resilient in lengthy legal battles against the state and private individuals. He is known to South Africa as the businessman who provoked the wrath of the notorious Shaik clan by blowing the whistle on corruption in the multi-billion rand arms deal. He's currently suing the government for losing a contract in the deal, which he blames, inter alia, on the irregular intervention of former defence procurement chief, Dr Chippy Shaik.

Possibly Reutech knew of Young's reputation as a litigant and were determined to get their hands on the equipment without having to fight it out in court. A shocked CCII engineer, who did not want to be named, described the scene that morning.

" They appeared from no-where. The story now was that they had to check something on the TRCs in the lab, or that they wanted to show some of the people how the TRCs looked.

"Then suddenly a trolley appeared and they whipped the TRCs out of here and onto bakkies parked outside Any questions on what they were doing were not answered. The TRCs were not packaged for transport and were only secured to the bakkies with some straps. Due care was definitely not taken to load the TRCs and there was a real sense of urgency from the RRS people to get out of here as quickly as possible.... they left as quickly as they came."

It was a messy departure. The receptionist, who in the meantime had recovered her cool, phoned CCII's legal officer, Odette Eksteen, who was only minutes away on her way to work. She came across the two bakkies driving away from the scene and defiantly drove her car in front of them, got out and demanded to know from the driver of one of the vehicles what was happening.

She said: "At this stage the passenger next to the driver just shouted: 'Ry! Ry!' and moved as if to open his door. I saw that this was getting ugly and begged the driver to please not damage my car. I did not even have time to move it because from then on everything happened very quickly. The RRS vehicle just pushed my car out the way and sped away with the other close behind."

Eksteen has laid a charge of reckless driving with the police, who have also been handed several statements by CCII employees.

Young said that it was "entirely possible" that the delicate and sensitive consoles would have been damaged in the operation - possibly severely setting back the production of the corvette radar systems: "We developed special transportation packaging to the value of about R500 000 for the devices. There is also a comprehensive manual on how to transport them safely by road. These guys threw them on the back of bakkies and tied them down with straps like those used to secure their sons' surfboards."

Young's attorney, Jeremy Tyfield has written to Reutech demanding an explanation for the: "bizarre, clandestine military-type operation," their representatives allegedly conducted.

Reutech say, in turn, that they have opened a case of reckless driving against a woman from CCII who was driving a Tazz motor car. Reutech spokesperson Monique Coetzer said both vehicles only sustained minor scratches and that the company did not wish to comment further on the incident as a police investigation was underway.

However Reutech only opened their case after being contacted for comment. Amongst RRS's shareholders are the powerful multinational arms company, European Aeronautic Defence and Space company (EADS) - better known to the South African public for its sponsorship of discount luxury cars for influential members of government - and Kgorong, a black empowerment company whose directors include Danisa Baloyi, a former chair of the Gauteng Tender Board and Mafika Mkhwanazi, who has recently quit as CEO of Transnet.

The radar systems have taken several years to complete. A SA Navy spokesperson said that if the components taken from CCII were damaged it could be a "catastrophe" as the ships would be useless without the components.

With acknowledgement to the Noseweek.