Publication: Dagens Nyheter Issued: Date: 2007-03-01 Reporter: Ylva Johnson Reporter: Nils Resare

Swedish Submarine Bribes

 

Publication  Dagens Nyheter
Sweden
Date

2007-03-01

Reporter

 Ylva Johnson, Nils Resare

 

[A fit for purpose translation from the Swedish original by Ylva Johnson and Richard Young]

State-owned Celsius, now part of the JAS industrial group, in 1999 paid three SEK million to SANCO, an organisation in alliance 
with the ANC in South Africa. After this payment SANCO supported the country's purchases of JAS Gripen.

Officially, the payment was a loan that would be used for creating 30 new small companies South Africa, however no such companies were ever established. All related projects have been said to have collapsed.

The money was used to covering administrative costs, says SANCO's  CEO Mlungisi Hlongwane to DN.

SANCO is an organisation comparable to ABF in Sweden,  but with an influence that at the time of the JAS business could be 
compared with the Swedish Trade Union Confederation. The organisation has been an active advocate for JAS, as have several heavy trade unions been towards the business.

The weapon producer Celsius was, along with Ericsson and Saab, included in the industrial group JAS, who shared the setup costs JAS. Celsius also owns 25 percent of the German company HDW, who received an order for submarines worth SEK 7,7 billion.

Mlungisi Hlongwane claims, however, that the money from Celsius had nothing to do with SANCO's support of JAS and the German submarines: "We did not even know that Celsius was a weapons producer; in that case we would not have taken towards the money."

But why believes that SANCO received the money: "many companies want to contribute to development in South Africa. We often get money from foreign companies that want to help us to support South African people."

In February 2000 Celsius bought by Saab. According to Stephen Laufer, spokesman for Gripen International in South Africa, the loan to SANCO was made. He does not want to reply as to the question why.

The CEO for Celsius at the time of the payment was Lars G Josefsson,  today CEO and group manager of State Vattenfall. He says that he does not remember the business with SANCO and therefore does not want make any comment.

Prosecutor-General Christer van den Kwast is shortly to decide if  a preliminary investigation will be initiated the sale of JAS to South Africa.

"We are continuously getting new information from the British and other sources concerning South Africa", says Christer van den Kwast. 

These bribes involve very large sums of money.


Background

Celsius had in 1999 approximately 10 000 employees and a turnover on SEK 12 billion.

Celsius produces weapon systems, among others, the JAS Gripen.

Among its subsidiaries is Bofors.

In February 2000 Celsius was bought by Saab. Until then, the Swedish state owned 61,7 percent of the equity and thereby controlled the company. Celsius CEO Lars G Josefsson estimated in 1999 that the South African JAS order was worth some SEK 1,5 billion Celsius.

With acknowledegments to Ylva Johnson, Nils Resare and Dagens Nyheter.


It is not at all surprising to hear that Celsius offered bribes to support the submarine deal.

The submarine acquisition should probably never have happened considering the current strategic threat to the RSA as well as its defence posture, defence budget, other national priorities, etc. Even the most senior planning officers in the SA Navy accepted that neither the country nor the SA Navy could afford to operate submarines. Many SA Navy officers were very surprised when they got both the most expensive frigates on offer, but also three nice new Type 209 coastal submarines to play with.

However, it has been reliably learned in the last two months that Ferrostaal paid a very large bribe to win the submarine deal. This makes sense because until a few weeks before the end of the selection process, Celsius was in front running to supply the submarine and the German Submarine Consortium was last. Suddenly at the very last, this position switched around. Nothing else makes sense other than a large bribe. It appears that the Germans could afford more than the Swedes.

In any case, the Celsius Kokums submarine shipyard was not long thereafter purchased by HDW. Negotiations were probably ongoing at the time of the RSA selection process. There's also a good chance that the Kokums yard was awarded some of the subcontracting work on the South African submarines as a quid pro quo.

The Ferrostaal bribes are apparently recorded in various company documents and financial statements found on the premises of MAN-Ferrostaal in Essen, Germany around the middle of last year. So far, the German investigating authorities are keeping very quite about this matter, just a little bit quieter than the Swedish authorities investigating the bribes paid by Saab for the JAS-39 Gripen deal.


The torture never stops.