Publication: Sapa Issued: Durban Date: 2004-11-29 Reporter: Wendy Jasson da Costa

Chippy Shaik Lied to Committee, Court Hears






Date 2004-11-29


Wendy Jasson da Costa


The former head of parliament's standing committee on public accounts (Scopa), Gavin Woods, on Monday told the Durban High Court that the Defence Department's former chief procurement officer, Chippy Shaik, lied to his committee *1.

Testifying in the Schabir Shaik fraud and corruption trial, Woods told the court that Shaik's brother Chippy Shaik had "misinformed *2" Scopa when he said he had recused himself from meetings relating to government's multi-billion rand arms deal.

Woods, an IFP MP, said the committee had a number of concerns relating to the acquisition process and that conflict of interest because of association was one of them.

He said Chippy Shaik was "extremely influential" throughout the procurement process and that Schabir, a businessman, had an interest in the arms deal, particularly the corvette contract.

The state alleges that Schabir Shaik paid a R1,2 million bribe to Deputy President Jacob Zuma in exchange for his influence.

Schabir Shaik is also alleged to have solicited a bribe of R500 000 for Zuma from Thomson-CSF in exchange for protection during investigations into arms deal irregularities.

Last week David Griesel from the Armaments Corporation of South Africa testified that South Africa had no policy in place for the acquisition of foreign arms when the markets opened up *3.

He said the policy was "tailor-made" as they went along and that Chippy Shaik was "to a very large extent driving the process." *3

On Monday Woods said there was a local supplier who bid for the corvette contract and had, according to documents, been given the work.

However, he said the contract eventually went to a French company called Thomson-CSF.

Woods told the court that the Auditor General conducted a special review of the defence acquisition process because of the huge sums of money involved.

He said at that stage Scopa was concerned about allegations that some things were amiss. Woods said Scopa called in the AG to find out how he arrived at certain conclusions.

He said the Scopa members looked at the "materiality" of the report. After considering recommendations by the AG for an investigation to be taken further but with a more forensic nature, they decided to call all the roleplayers in government to appear before Scopa.

This included the different departments like the finance department that were involved in the acquisition process.

He said they took accounting officers from the various departments through an array of questions and used the transcripts from these proceedings to request further documents.

After examining all the information they had to report back to parliament and make recommendations.

Woods said some of their other concerns included: cost to state; offset arrangements; and the selection of private contractors.

Woods said Scopa was also concerned about the process in awarding the fighter trainer contract because they felt that "particular interventions took place that was very far removed from the procurement process *3."

He said government also had no interest in the selection of sub-contractors *4.

He said from the review conducted by the AG it appeared that key stages of the procurement process had broken down.

Prosecutor Billy Downer asked him why Scopa had equated arms deal processes as a high risk transaction in the introduction of its report.

Woods said Scopa was of the opinion that it was a well-documented fact that malpractices always occurred where arms deals were done anywhere in the world *5.

There was no reason to believe that it would not happen in South Africa.

The corvette contract was eventually awarded to the Germany Frigate Consortium of which ADS was a part.

Schabir Shaik's Nkobi Holdings and Thomson-CSF had a joint shareholding in ADS.

The hearing continues on Tuesday.

With acknowledgement to Wendy Jasson da Costa and Sapa.

*1  Apart from my unreported testimony at the Public Hearings, this has taken four years to be properly ventilated.

*2  Chippy and his DoD team of RAdm(JG) S.J. Verster and RAdm(JG) J.E.G. Kamerman had a fine old time misleading SCOPA on that day in October 2000. Unpublished drafts of the JIT Report were fairly explicit in this regard, but after dissembling by Shauket Fakie CA(SA) and his reporting editing team of Advocates Lionel van Tonder and Christoffel Fourie seriously de-emphasised this matter in the final JIT Report.

*3  Armscor certainly had a well tested and documented acquisition processes in place for all manner of system acquisitions, including foreign large acquisitions.

Armscor's acquisition process may well have had no place for the intervention of the likes of Mandela, Mbeki, Modise and Chippy Shaikh to intervene in the process in order to achieve pre-determined outcomes favouring vested interests; or for the multiple, simultaneous acquisition of unaffordable and largely unnecessary weapons of mass donation.

*4  Government time and again made averments that they had no interest in the selection of sub-contractors.

*5  Especially where the French and specifically where Thomson-CSF (now renamed Thales) are concerned.