Publication: The Star Issued: Date: 2011-06-17 Reporter:

Swedish giant says its British partner BAE paid out R24m to clinch sale of 28 Gripens



The Star



Web Link

An admission by Swedish defence group Saab that millions were paid to clinch the South African deal for fighter jets has renewed calls for the re-opening of investigations into the arms deal.

Saab said its former British partner BAE Systems had paid the bribes without its knowledge.

Cape Town mayor Patricia de Lille, who has been at the forefront for a full investigation into the deal, has called on government this morning to be “brave enough” to reopen the inquiry.

This comes a day after Swedish defence group Saab admitted that millions were paid to clinch the South African deal for fighter jets.

In a statement on Wednesday Saab said BAE Systems had paid R24 million in “bonuses and salaries” between 2003 and 2005 for the deal, which originally involved 28 JAS Gripen fighters.

The comments came after Sweden’s TV4 television channel said it had evidence that Saab had promised to pay South African defence consultant Fana Hlongwane, who also served as a consultant to the Swedish firm, millions of euros in bonuses if Pretoria did not back out of the Gripen deal.

Hlongwane was an adviser to then-Defence Minister Joe Modise at the time of the arms deal.

BAE Systems said last week it had sold its stake in Saab for £152m (R1.7 billion). The 1999 deal was for 1.6bn, was later reduced to 26 jets, the last to be delivered next year.

Just one month ago Saab denied any allegations of corruption regarding the arms deal.

In its about-turn, Saab said R24m had been paid by its South African subsidiary Sanip, which was then controlled by BAE Systems. But Saab president and chief executive Haakan Bushke denied responsibility, saying in a statement: “A person employed by BAE Systems has without Saab’s knowledge signed for us an unknown contract, signed for us up until now unknown transactions.

Former organised crime unit the Scorpions raided Hlongwane’s Hyde Park home in Joburg and Zimbali Estate in KwaZuluNatal in 2008 in search of documentation indicating exactly when Hlongwane was appointed as Modise’s ministerial adviser, and his period of employment with the Department of Defence.

The raid came as a request from the UK’s Serious Fraud Office (SFO), who were investigating allegations of corruption for substantial payments made by BAE Systems to Hlongwane.

Saab’s admittance to paying over money comes just two weeks after the Hawks announced that their investigation into the arms deal was closed.

At the time the DA called on Parliament to summon the head of the Hawks, Anwa Dramat, to explain the decision to close the remaining two legs of the investigation.

The Hawks are yet to appear before MPs to explain the closing down of the probe, despite repeated requests from the standing committee on public accounts.

De Lille said she felt vindicated after Saab’s revelations yesterday.

She blew the lid on the arms deal as a member of Parliament in 1999 in what has now become known as the De Lille dossier.

“Since then we have been saying to government, please investigate, but they refuse,” said De Lille. She said at least two of the allegations in the dossier have led to successful prosecutions – those of Schabir Shaik and Tony Yengeni – and that the third prosecution was supposed to be against Jacob Zuma.

“The Hawks were created with the express purpose to stop the investigation into the arms deal. I’ve always said you can cover up as much as you like but the truth will always leak out.” She said the country would be paying off this deal for the next 30 to 50 years.

Hawks spokesman McIntosh Polela said they had just seen the allegations and were considering what their next move would be: “These are very serious allegations and we will not ignore them. We will study the allegations and see how to take this forward.”

Hlongwane did not answer his phone this morning.

DA MP David Maynier spoke about a memo they received which explained why the Hawks had stopped the investigation.

He pointed to claims in the memo that three suspects in the BAE Systems leg of the deal had died, when in fact one suspect, Hlongwane, who allegedly received more than R200 million from BAE, was alive; and the complaint that there were difficulties obtaining evidence, even though the memo conceded that the UK’s Serious Fraud Office had shared information with the Scorpions, the predecessor of the Hawks, and that these documents still needed to be “perused and analysed”.

“It is hard to believe that this memorandum, riddled with contradictions and factual errors, formed the basis of the decision to close the investigation,” Maynier said. “This seems to be an exciting new development and if it is indeed correct that Saab admitted it had paid bribes via its British partner to an individual or individuals in South Africa, it would seem to me that it will put the Hawks under immense pressure to re-open their investigation into the arms deal.”

Defence and Military Veterans Minister Lindiwe Sisulu’s spokesman Ndivhuwo Mabaya would not be drawn on the matter. “We are not commenting on this. Every week there are allegations. We will not comment,” he said.

With acknowledgements to The Star and Duncan Guy.