Publication: Sunday Times Issued: Date: 2008-08-11 Reporter: Werner Swart

Ferrostaal Denies Mbeki Bribe



Sunday Times



Reporter Werner Swart

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Arms deal company demands apology

The German shipbuilding giant at the centre of bribery allegations involving President Thabo Mbeki has strongly rejected claims it paid officials to secure a lucrative contract in the controversial arms deal.

This follows yet another explosive series of articles in the Sunday Times, which last week reported allegations that German company MAN Ferrostaal paid R30-million to Mbeki, of which he was said to have given R2-million to ANC president Jacob Zuma and the rest to the ANC.

Yesterday the newspaper reported that the company had reneged on commitments to provide several offset projects.

The Sunday Times reported that MAN Ferrostaal, which pledged to invest in the economy, failed to make good on its promises in a number of projects designed to create jobs and boost the economy.

The projects the industrial giant failed to deliver include a call centre that was shut down after a year, a condom factory in the Eastern Cape which was never built and the Coega stainless-steel mill, which was abandoned six months after the company signed a deal with the government.

The report said that the Department of Trade and Industry's industrial participation secretariat had written to MAN Ferrostaal to address its shortcomings. However, the DTI had not imposed penalties on the company.

In a statement issued from Germany by MAN Ferrostaal yesterday, the company denied making any payments to Mbeki, Zuma or the ANC.

"MAN Ferrostaal never made any payments to SA President Thabo Mbeki, to Jacob Zuma or to any other member of the ANC or to any other public official. MAN Ferrostaal in addition states that the articles mentioned contain a large number of factual errors with regards to MAN Ferrostaal and therefore violates the basics of journalistic accuracy," the statement reads.

Mbeki's office last week said he might pursue legal action against the Sunday Times for its report.

MAN Ferrostaal has now warned that it too is considering legal steps.

"The company has requested the newspaper to publish a rectification of the article. The options of legal action are currently being evaluated," it said.

MAN Ferrostaal's statement said its offset programmes were "well under way" citing a deal with Armscor, a production facility for microchips in Pretoria, tea plantations and a fabrication yard for oil and gas platforms in Saldanha Bay as proof *1.

"MAN Ferrostaal has made a substantial contribution to the SA economy, having invested several hundreds of million rand *2 and having saved and created several thousand jobs," it said.

Sunday Times editor Mondli Makhanya declined to comment, except to say: "Every word we have published is correct. This investigation has plenty of legs and lots of oxygen."

ID leader Patricia de Lille said the report vindicated her and she was "not surprised" by the latest revelations concerning the arms deal.

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With acknowledgements to Werner Swart and Sunday Times.

*1*2    This is minuscule compared with what Ferrostaal offered and with which it was awarded the supply contract.