Zimbabwe linked to Iran sanctions busting

18 March 2012 - 02:28 By Sunday Times reporters
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Zimbabwe's role as a potential conduit for military equipment destined for Iran is likely to come under the spotlight as international agencies probe claims that bribes were solicited in South Africa for sanctions-busting deals with the Persian Gulf state.

This week, Iranian President Mahmoud Ahmadinejad met Emmerson Mnangagwa, the Zimbabwe Defence Minister, in Tehran and pledged to strengthen relations in defiance of international sanctions against both countries.

Separately, Iranian Defence Minister Brigadier-General Ahmad Vahidi met Mnangagwa, and pledged to "reinvigorate Zimbabwe's defence power", according to Fars News Agency.

This comes days after Gugu Mtshali, the girlfriend of South African Deputy President Kgalema Motlanthe, was implicated in soliciting a R104-million "bribe" to obtain government support for a company that tried to clinch a R2-billion sanctions-busting deal with Iran.

Last week, the South African edition of the Sunday Times revealed that Mtshali and associates of Motlanthe, including former De Beers executive Raisaka Masebelanga, met delegates of Cape Town-based 360 Aviation at a Bryanston, Johannesburg restaurant to discuss "buying" government support for the deal on February 17 last year.

Barry Oberholzer, managing director of 360 Aviation, said: "We believe we were being asked [for] a bribe ... in exchange for [government] support." This week Motlanthe asked South African public protector Thuli Madonsela to probe the allegations, as he and Mtshali were "firmly of the view that they have committed no wrongdoing of any kind".

Justice Minister Jeff Radebe told the parliament's defence committee the government's National Conventional Arms Control Committee (NCACC) was probing 360 Aviation and other alleged sanctions-busters.

"We have already started investigations against the companies mentioned and individuals mentioned. We will report back to NCACC should we find any contravention of the National Conventional Arms Control Act," director Vanessa du Toit is reported to have said.

This may yet implicate Zimbabwean companies in the transfer of US-made equipment with dual civilian and military use to Iran.

South Africa is a signatory to a number of United Nations resolutions, including a 2010 resolution that says all states "shall prevent the direct or indirect supply, sale or transfer to Iran" of any tanks, combat vehicles, attack helicopters or "related material, including spare parts".

While Zimbabwe was not part of the Security Council that voted on that resolution, it remains a member of the United Nations obliged to implement the resolutions.

Allegations, as yet unconfirmed, suggest helicopters with potential military application may have been transported from South Africa through Zimbabwe en route to Tehran.

Last week's revelations threaten to blow the lid on how other companies, besides 360 Aviation, helped ship equipment with potential military use to Iran.

Oberholzer confirmed that 360 Aviation had been instrumental in supplying Iran with a Bell helicopter, spare parts and three airliners via South Africa through an ingenious sanctions-busting scheme - but the company needed top-level political support to pull off a new deal.

However, Motlanthe denied that he had any knowledge of his partner's involvement with 360 Aviation.

The deputy president's spokesman, Thabo Masebe, said: "He has at no stage discussed such a matter with any person, including the South African Department of Trade and Industry. The deputy president did not meet with 360 Aviation in the manner suggested or at all."

However, 360 Aviation co-founder Marcel Oberholzer told the Sunday Times that he had in fact met Motlanthe in June 2011 with Masebelanga, although they had not discussed the deal.

The plan, which ultimately collapsed, would have seen a front company - set up by 360 Aviation - win a five-year contract, worth at least R450-million a year, to supply US-made Bell helicopters and parts to the National Iranian Oil Company.

Crucially, aviation experts say, many Bell spare parts can be used in Iranian attack helicopters, potentially bolstering Iranian military firepower. The new deal would also have led to South Africa violating its UN Security Council obligation - the 2010 resolution prohibited member states from supplying military-related products.

Through access to recordings and confidential documents and interviews with three sources directly involved in the deal, the Sunday Times has established that:

Mtshali was at the Bryanston meeting at which Masebelanga solicited a R10-million "bribe" and a R94-million profit share to obtain "support for the deal" from the government;

Motlanthe's associates obtained a letter signed by Riaan le Roux, the Department of Trade and Industry's acting deputy director-general; and

Mtshali planned to fly to Iran with Masebelanga and another close associate of Motlanthe, former Land Bank executive Herman Moeketsi, to clinch the deal.

In written responses, Mtshali said she had "never attended a formal meeting" with 360 Aviation. After being sent the recording on which her voice can be heard, she refused to comment further.

But the Sunday Times has learnt that she privately admitted being "introduced" to Barry Oberholzer.

These revelations of how Motlanthe's romantic partner was involved in a bid to "sell" government support come as Barry Oberholzer spoke about his role in setting up the scheme, and how US intelligence had sought his assistance in nailing Iran sanctions-busting schemes.

Barry Oberholzer said the purpose of the Bryanston meeting was to secure a support letter for the Iran deal from Motlanthe, through his associates: "This was primarily for political protection from prosecution and assistance at a high level in Iran."

His explanation is supported by a recording of the meeting, which leaves no doubt that the discussion - held in Mtshali's presence - was about how to "buy" government support for a lucrative sanctions-busting opportunity.

The price: an up-front R10-million "consultancy fee" and shares worth about R94-million.

Masebelanga clearly spells out his ethos of government support for sale, the R10-million fee to get the ball rolling. "There is nothing for mahala," he said.

In the recording, North West businessman Joe Mboweni says he works "on instructions from mama", who is understood to be Mtshali, and adds that he is "obviously" interested in discussing the profit share. To which Mtshali is heard saying: "Joe will be instructing." Mboweni adds: "When you are a politician you are not just political, you must also look at the commercial side."

Attempts to reach Mboweni this week were unsuccessful.

When the Sunday Times confronted Masebelanga with the agreement, he said: "I regret it" and that it was "a bit inappropriate, unfortunate".

Later, however, he sent a written response, saying the contract he had signed was "doctored beyond belief", as it did not include the full intentions of the parties. This is contradicted by his business partner Moeketsi, who confirmed that he had obtained the support letter from the Department of Trade and Industry (DTI), and was expecting R5-million for doing so.

Mtshali said she had "no knowledge of the letter from the DTI" and "has not been party to any agreement with 360 Aviation". The Department of Trade and Industry said it would consider launching a probe.

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