Publication: Business Day Issued: Date: 2011-06-20 Reporter: Wyndham Hartley

Arms deal payments ‘could be legal’



Business Day



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Reporter Wyndham Hartley


Defence specialist says the payment of R24m to Fana Hlongwane may have been legal.

CAPE TOWN ­ The payment of R24m to so-called defence consultant Fana Hlongwane may have been legal unless he was working for the state at the time of the payments, defence specialist Helmoed-Romer Heitman said yesterday.

This follows the revelation last week by Saab president Håkan Buskhe that R24m was paid to Mr Hlongwane after the money was transferred into an account of one of its subsidiaries by British giant arms manufacturer BAE Systems.

Saab and BAE were partners in the deal to supply Gripen fighter jets and Hawk trainers to SA in 1999.

The revelation has prompted Democratic Alliance MP David Maynier to call on Hawks head Gen Anwa Dramat to reopen the investigation of the arms deal because it amounted to a prima facie case of bribery and/or corruption .

The Ceasefire Campaign has also supported a call for the arms deal investigation to be reopened.

Another obstacle to finding resolution on the payment also lies in the deal struck between Britain’s Serious Fraud Office and BAE last year , where the company plea-bargained on two criminal charges and paid a fine of about R3bn.

The BBC website quotes BAE as saying: "This and other matters were fully reviewed by the UK Serious Fraud Office and formed part of the overall resolution that the company reached with the (fraud office) in February 2010. Any questions relating to Saab and its subsidiaries should be directed to Saab."

Mr Heitman said the serious questions Mr Hlongwane needed to answer were, "Was he working for the state at the time the payments were made, or, was he contracted while working for the state and then paid later?"

He suggested if this was the case, the payments were illegal. "But if he undertook to handle BAE’s offset obligations once he had left the employment of the state, then it appears the payments are legal."

Mr Maynier said "the consultant who received the secret payments is reportedly Fana Hlongwane, who was an adviser to former minister of defence Joe Modise, and who was alleged to have received up to R200m in ‘commissions’ relating to the acquisition of 26 Gripen fighter jets from Saab/British Aerospace.

"The information revealed by Mr Buskhe is very serious. It amounts to a prima facie case of bribery and/or corruption in respect of the arms deal and must be investigated.

"If the payments were above board, why was it necessary to launder the money through Sanip , a company which was reportedly set up by Saab-British Aerospace to manage the arms deal offsets? The DA will therefore be writing to Gen Anwa Dramat, head of the Hawks, to confirm that the Hawks will be investigating the R24m payment reportedly made to (Mr Hlongwane) by BAE Systems," he said.

Ceasefire Campaign spokesman Gunvant Govindjee said yesterday: "South Africans deserve a transparent government prepared to act with the necessary seriousness in addressing the bribery allegations that have bedevilled our hard-won democracy for more than a decade."

Mr Maynier has also forwarded video evidence of SA-made sniper rifles in Libya to Public Protector Thuli Madonsela, who has been asked to investigate the alleged sale of the weapons to Libya last year.

With acknowledgements to Business Day and Wyndham Hartley.

It's uncanny how defence specialists come to the rescue of the Arms Deal as surely as days follow nights.

Wonder why?



Owements and Duements?

Regarding the R24 million payment to Fana Hlongwane, these were made in 2003.

Hlongwane was official Defence Advisor to Joe Modise in the 1995 to 1998 era.

What did Hlongwane know about defence?

A lot less than Helmoed-Romer Heitman.

What does Helmoed-Romer Heitman know about covert international funds transfers?

A lot less than Fana Hlongwane.

In any case Fana Hlongwane set himself up as a beneficiary of the Arms Deal from being an official insider in the preparatory phase. That is unlawful. It's called a conflict of interest, in this case a kind of self-dealing. In this case the unlawful tends to criminal wrongdoing.

A lot of the R200-odd million was paid to Hlongwane by BAE and Saab for saving Tranche 3 of the Gripen deal.

The DoD and SAAF knew that the entire Gripen deal was wrong and neither the country nor the SAAF could afford it. But Modise advised by Hlongwane insisted. So the deal was divided into three tranches, the second and third of which could be cancelled by the SA Government at a date after the date of the contract signature (2004 for Tranche 3). BAE and Saab loaded the price of Tranche 1 by 35% to make not electing to take Tranches 2 and 3 unattractive.

With literally tens of millions of Rands of covert commissions at stake with Tranche 3, Hlongwane ensured that this was not cancelled.

But Modise went to meet Lucifer SKD in 2001, so Hlongwane was no longer an agent for him in 2003.

He was an agent for others, Thabo, Ayenceeeeeeee, et al.

Now the SAAF has 24 odd Gripens with the last few due next year and it can't afford to operate them or arm them.


Nah - ask Helmoed why.

Could be legal.