Publication: Mail and Guardian
Issued:
Date: 2008-10-24
Reporter: Sam Sole
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Smokes, Sex and
The Arms Deal
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| Publication |
Mail and Guardian
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| Date |
2008-10-24
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|
Reporter
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Sam Sole
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Web Link
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www.mg.co.za
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A net of local and international investigations is drawing in on one
of the most controversial and influential players in the South African arms deal
Zimbabwean tycoon John Bredenkamp. Sam Sole reports
In March 2006 a heavily armed Scorpions team launched raids on a set of
cigarette importing and manufacturing businesses in Linbro Park, Sandton. In
October 2006 members of the United Kingdom Serious Fraud Office (SFO) swooped on
the Berkshire premises of Aviation Consultancy Services (ACS).
Though he may not be the immediate target, one man appears in the background of
both these probes: John Arnold Bredenkamp.
Bredenkamp (68) is a man who made his fortune trading in tobacco and arms with
pariah states, beginning with Ian Smith's Rhodesia and ending with Robert
Mugabe's Zimbabwe with Saddam Hussain's Iraq thrown in along the way (see
"Barely legal").
But ACS, which has a long-standing relationship with
British defence company BAE-Systems, also played a
key role in lobbying for BAE to secure the sale of fighters and jet trainers in
South Africa's ill-fated arms deal.
Last year the Mail & Guardian revealed that ACS's sister company, Kayswell
Services, registered in the tax haven of the British Virgin Islands (BVI),
received about £37-million from BAE for its role in the South African deal (now
worth R691-million).
Now both the SFO and the Scorpions are looking more closely at what ACS might
have done to earn this staggering "commission"
notably whether the company facilitated the onward payment of bribes to South
African decisionmakers (see "Dangerous liasons 2").
But it is the investigation of Bredenkamp's tobacco interests that might lead to
the unravelling of an empire that has tentacles in
virtually the entire Southern African region.
Dangerous Liaisons 1: JB and The Suspects
Mail & Guardian
Sam Sole
24 October 2008
Cigarette smuggling is the contraband business to be in. The returns are as good
as those from drugs and the risks and penalties are relatively low (see "Better
than drugs").
Investigators say there is a "golden highway" of cigarette and tobacco smuggling
into South Africa from Zimbabwe and other Southern African states with lax
border controls and weak policing.
Bredenkamp's position on or off that highway is still under investigation.
Bredenkamp trades in tobacco via Breco International, which has headquarters in
Harare and manufactures the Mega brand. But he also operates through Masters
International Tobacco Manufacturing in Johannesburg.
The M&G has established that in September this year a yellowjacketed national
enforcement unit from the South African Revenue Service (Sars) launched an
inspection at the Johannesburg premises of Masters International Tobacco
Manufacturing, confiscating about 4 500 master cases of cigarettes, comprising
45-million cigarettes.
It was by far the biggest seizure to take place in terms of a nationwide Sars
project to crack down on the illicit trade in tobacco products that started this
year, which has seen more than 7 500 master cases seized.
Sars, bound by secrecy regarding tax matters, won't say exactly why the
cigarettes were seized.
Around the time of the raid, Bredenkamp also put Masters's local company into
liquidation.
What is clear is that Bredenkamp has had business relationships with individuals
who have been alleged to be part of a contraband network that is the subject of
parallel Sars and Scorpions investigations.
The M&G understands that the Masters raid flowed from information obtained
during an earlier round of Sars inspections in June this year targeting another
company with Zimbabwean connections, Mavambo Coaches.
Mavambo, the business of which is passenger transport between South Africa and
Zimbabwe, is a subsidiary of Pioneer Corporation Africa, a logistics company
listed on the Harare stock exchange.
Mavambo was also a target of the armed Scorpions raid in March 2006. In that
case the Scorpions obtained warrants of arrest for Zimbwean citizens Yakub
Mahomed and Simon Rudland, the latter described as the "de facto managing
director" for Mavambo as well as for South African Ebrahim Adamjee.
According to the affidavit used to obtain search warrants, Mahomed ran two
related cigarette manufacturing companies, Gold Leaf and Sahawi, which were used
to supply cigarettes on which no VAT or excise duty had been paid.
Adamjee allegedly "controlled the cash generated from the illegal cigarette
sales" and some of the cash was laundered through Mavambo and other accounts
controlled by Rudland, who was also allegedly involved in smuggling Sahawi
cigarettes.
All those involved deny any wrongdoing.
The investigation has stalled because of a challenge to the Scorpions search and
seizure process that is still awaiting a hearing in the Supreme Court of Appeal.
The case was formally withdrawn because all the seized documents are under seal
at the Johannesburg High Court pending the outcome of the appeal process.
Mohamed told the M&G this week that the case was dead and that the Scorpions had
"got the wrong end of the stick".
But this June's Sars raids at Mavambo, where computers and documents were
removed, suggest that the investigation is not over.
However, there is also little to suggest any relationship between Mahomed and
Bredenkamp except the intimacy of a US$4-million loan.
In August this year Mahomed and Sahawi issued summons against Bredenkamp in the
Harare High Court, claiming that Mahomed entered into an oral agreement with
Bredenkamp to make a US currency-denominated loan to be repaid when Bredenkamp
had sold his interests in the Mukondo mine in the Democratic Republic of Congo.
According to the summons, from January 2001 to November 2002 Bredenkamp was
advanced a total of US$4,27-million.
He repaid US$400 000, leaving a shortfall of US$3,87-million, plus interest at
6% a annum.
Mahomed said this week his lawyers were negotiating with Bredenkamp about the
repayment of the loan. He described the advance as "an investment" and
Bredenkamp as a competitor: "The man has never done me a single favour."
However, Mahomed conceded they had once considered a joint venture, for which he
had put up a deposit on the purchase of some cigarette machinery.
Last week also saw the arrest in London of Tribert Rujigiro Ayabatwa, whose
Mastermind cigarette group also ran a short-lived joint venture with Mohamed
called African American Tobacco.
In the Scorpions affidavit it was claimed that Mahomed's Sahawi operation also
sold cigarettes sourced from Mastermind, without any VAT invoices.
Ayabatwa, a Rwandan, set up a Mastermind cigarette factory in East London in the
1990s but, since 2005, has been wanted in connection with another Scorpions case
allegedly involving R55-million in excise tax and VAT fraud.
Dangerous Liaisons 2: JB and The Secret Agency
Mail & Guardian
Sam Sole
24 October 2008
The website of John Bredenkamp's Breco Group is keen to suggest its hands-on
approach: "A small management team enables fast decisions to be taken," it
boasts.
The only member of the team actually profiled is Bredenkamp.
However, in one section there is a contrastingly coy tone about the role of the
"Group Chairman".
Under the heading "Representative for aircraft
manufacturers", the website notes: "In respect of defence procurement,
John Bredenkamp is a passive investor in a company which acts as a ...
consultant for established European and North American aircraft manufacturers in
Southern Africa with valid Government approved export licences. John Bredenkamp
is not involved in any day-to-day activities of the company."
The unnamed company, Aviation Consultancy Services (ACS),
represents the dark heart of the Breco empire and despite the reassurances about
government approval, Bredenkamp clearly wants it understood that he doesn't know
exactly what goes on there.
Since the raid on ACS and Breco offices in 2006 by the UK Serious Fraud Office (SFO),
this hands-off approach to the arms dealing side of his business has been
emphasised.The raid was part of a broad SFO investigation into possible
bribery by defence giant BAE-Systems in various
parts of the world, including South Africa.
For example, his spokesperson told Africa Confidential, "Mr Bredenkamp was not
personally involved with the BAE-Systems deal in South Africa. He knows nobody
who was on the BAE-Systems side of the deal in South Africa. And likewise Mr
Bredenkamp doesn't know anyone on the South African government side of the
deal."
The importance of Bredenkamp's stance of non-involvement has increased as
evidence has emerged that he benefited personally from the
deal.
In January 2007 the M&G revealed the SFO had obtained information indicating
that BAE paid £37-million to an ACS-linked company, Kayswell Services, in
commissions on the South African deal alongside generous payments to
local BAE agent Richard Charter (see Dangerous
liaisons 3: JB and Mrs Charter) and to Fana Hlongwane,
former adviser to the late defence minister, Joe Modise.
And earlier this year Africa Confidential revealed that internal company
documentation showed that of £26-million paid by BAE to Kayswell between June
2003 and September 2005 about
£10-million had been transferred for the benefit of
Bredenkamp.
Now the M&G has had insight into the same documentation, which sets out
in more detail who exactly makes up ACS and how they benefited.
The three signatories on the Kayswell bank account are listed as Bredenkamp,
Jules Pelissier and Graham Andrews. Pelissier, a former Rhodesian special branch
policeman, is effectively the chief executive of ACS. Andrews is Bredenkamp's
former accountant, now resident in the UK.
The beneficial owners of Kayswell are listed as Bredenkamp, Pelissier, Walter
Hailwax, Richard Passaportis and Trevor Wilmans. Hailwax, who runs the Namibian
branch of ACS, sat on the board of Windhoeker Maschinenfabrik, a military
vehicle manufacturer owned by the Namibian Defence Force.
Passaportis is based in Zimbabwe.
Wilmans, a former member of South African military intelligence, runs the South
African operation of ACS and, according to former associates of Bredenkamp, also
has good contacts in Botswana, where he is friendly with President Ian Khama.
The documents obtained by the M&G reflect payments of £2,5-million to Hailwax,
£1,5-million to Passaportis, £812 016 to Wilmans and £513 067 to Pelissier as
well as significant transfers to two entities, the Willow Trust and the Sebel
Trust, that may be linked to one or more of the owners.
It is likely that transfers from BAE continued after 2005 when the records
obtained by the M&G come to an end as such commissions are generally linked to
contractual disbursements received from the buyer, in this case, South Africa.
Given these payments, the question being probed by both the SFO and the
Scorpions is what ACS did to earn its money in South
Africa, given that Charter was the "official" registered agent for BAE.
Bredenkamp claims not to have been involved in the South African deal, but one
former associate told the M&G Bredenkamp had personally met former defence
minister Joe Modise on at least one occasion in South Africa during the lobbying
process.
Modise is dead and the M&G not able to verify this claim.
Bredenkamp failed to answer questions from the M&G about this allegation, as
well as about what contact other members of ACS might have had with South
African decision-makers.
Bredenkamp was also asked about whether it was correct, as alleged by one of his
former associates, that he was on good social terms with Richard Evans, the
former chair and chief executive of BAE. Evans has been listed as a suspect in
the SFO investigation.
Through his lawyer Bredenkamp said he had not been given enough time to respond
to questions.
The documents obtained by the M&G also disclose payment of
US$5million to ACS by Italian company Augusta as commission on the sale of
helicopters to South Africa.
Meanwhile, the SFO investigation appears to be gaining momentum.
Last week an agent linked to lobbying for BAE in Czechoslovakia and Austria,
Count Alfons MensedorffPouilly, was arrested and questioned by the SFO before
being released.
Another man was also questioned. It is understood to be Julian Scopes, a former
head of government liaison for the BAE and now the company's operations chief in
India.
Dangerous Liaisons 3: JB and Mrs Charter
Mail & Guardian
Sam Sole
24 October 2008
One of the most remarkable alliances to emerge from
the arms deal has been the romantic attachment between John Bredenkamp (68) and
Janet Charter (48).
Janet Charter is the widow and heir of Richard Charter, the acknowledged South
African agent for BAE-Systems, while Bredenkamp has never admitted to any role
in the South African arms deal, despite a long association with BAE and
despite allegations he was a beneficiary of commissions on the deal.
It is not clear whether the relationship is emotional or based on a more
hard-nosed assessment of common interests. These
might include the possibility that, given the ongoing criminal investigations,
BAE may be reluctant to fully honour any further commission payments and might
seek to shift responsibility for any improprieties
in the deal on to its agents.
Bredenkamp failed to answer questions about how or when he became involved with
Janet Charter. He cited lack of time to respond.
He has previously stated that he met Richard Charter only three times before
Charter's death in 2004, but failed to answer questions from the M&G about how
the two men coordinated or divided up the representation of BAE in South Africa
between Charter's Osprey Aviation and Bredenkamp's Aviation Consultancy
Services.
Janet Charter, who now lives in London, has previously failed to return calls.
The alliance may also be related to concerns over safety.
According to sources close to the family, Charter has expressed concerns over
both her own safety and that of Bredenkamp and on occasion has questioned
whether there might have been something untoward in the
accidental death of her husband.
Richard Charter was drowned in a canoeing accident near his luxury farm
on the Orange River on Sunday January 25 2004.
The M&G has established that Charter was due to attend a
consultation with his lawyer on the following Monday relating to a
possible request by the Scorpions to answer questions under oath in connection
with his role in the arms deal.
According to someone familiar with the investigation, he had indicated he was
willing to be cooperative, though he did not believe he was personally guilty of
doing anything wrong.
According to several sources close to the family, Charter,
normally an extremely calm and controlled person, was agitated in the period
before his death.
He indicated he felt betrayed in some way by people in the
ANC, and especially by late defence minister Joe Modise's former adviser,
Fana Hlongwane.
Hlongwane has repeatedly failed to respond to attempts to pose questions to him
about his role in the arms deal.
Barely Legal: John Bredenkamp
Mail & Guardian
Sam Sole
24 October 2008
Bredenkamp was born in Kimberley in 1940 and educated in Zimbabwe at Prince
Edward School.
He joined Gallaher, the international tobacco concern, in Zimbabwe and was
transferred to Holland in 1968. In 1976, he founded the Casalee Group of
companies in Belgium. Casalee was primarily a leaf tobacco company but was also
engaged in barter deals.
It was Casalee that apparently served as a sanctions-busting vehicle during the
dying days of Rhodesia. Bredenkamp told a newspaper in 2000: "Yes, I was
requested by the government of the day to help source supplies and equipment for
the beleaguered country, and yes, I did so ... But no, for many years, I have
not been involved in the arms business at all."
Bredenkamp also appears to have been involved in sanctions busting for South
Africa. Minutes of the Strategic Fuel Fund for March 13 1989 carry a note
stating: "John Bredenkamp, who has acted confidentially for SA govt. before,
offers oil [Casalee]."
Casalee was also linked as an agent for supplies of landmines to Iraq during the
Iran-Iraq war and other supplies to Iran.
It became the biggest non-US leaf tobacco company and was sold in 1993 to
Universal Leaf Tobacco for US$100-million.
In Zimbabwe Bredenkamp drew flak in some quarters for his closeness to the
Mugabe government. He piggy-backed on the Zimbabwean military support for
Laurent Kabila when Kabila seized power in the Democratic Republic of Congo and
was granted copper and cobalt mining rights at the Mukondo mine in Eastern DRC.
At some stage this was in partnership with Zimbabwean fugitive Billy Rautenbach,
but the two fell out when Rautenbach elbowed Bredenkamp aside.
Bredenkamp was cited in a United Nations report on resource exploitation in
Congo, but later cleared, following extensive legal and political lobbying.
The UN report also accused him of being involved in the supply of spare parts
for Zimbabwean BAE Hawk jets early in 2002 in breach of European Union
sanctions.
In 2006 Bredenkamp was able to sell his stake in Mukondo to Israeli diamond
trader Dan Gertler for US$57-million.
He also has tourism interests in Zimbabwe, Mozambique and South Africa.
In September 2006 Bredenkamp was acquitted in Zimbabwe on charges that he used a
South African passport on international journeys. Zimbabwean citizenship law
does not permit dual nationality.
He is said to be struggling to have his Zimbabwean passport renewed.
Bredenkamp Responds
Mail & Guardian
Sam Sole
24 October 2008
Questions were sent to John Bredenkamp's South African lawyer, Ian
Small-Smith, at 8.05am on Wednesday this week, giving him until 10am the next
day to respond.
Small-Smith sent the following reply: "I confirm that I act on behalf of Mr.
Bredenkamp. We acknowledge receipt of your questionnaire on 22 October 2008. We
believe it is irresponsible of you to expect us to respond thereto within a day.
"I have read through the allegations and point out that there are various
factual inaccuracies and falsehoods in your document. Publishing it would be
slanderous.
"I have been instructed to point out that Mr Bredenkamp's rights remain fully
reserved should you proceed with the publication of this article."
Curiouser and curiouser.
With acknowledgements to Sam Sole and Mail and Guardian.