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Mon Oct 20 19:52:45 SAST 2014

Hawks reveal Arms deal bombshell

NKULULEKO NCANA, SIBUSISO NGALWA and CAIPHUS KGOSANA | 31 July, 2011 02:11
Gripen jet fighter over the Union Buildings. File picture.
Image by: http://www.gripen.com/

The Hawks have taken the first step towards re-opening the multibillion-rand arms deal probe - which could expose those who took bribes to prosecution.

The head of the Directorate for Priority Crime Investigations, Anwar Dramat, wrote to the Standing Committee on Public Accounts (Scopa) on Wednesday informing it of the Hawks' intention to speak to European investigators to establish whether or not criminal charges should be brought against any South Africans.

The Hawks controversially dropped the probe into the arms deal in September last year, arguing that prospects of successful prosecutions were slim.

In a letter to Scopa chairman Themba Godi, Dramat says the Hawks are following up on last month's admission by Swedish defence group Saab that its former British partner, BAE Systems, paid R24-million in bribes to secure a South African contract for 26 JAS Gripen fighter jets. All told, BAE systems spent R1-billion on what it called "commissions" in the arms deal.

Dramat writes : "I have already instructed two officials ... to approach the relevant authorities in both Sweden (National Anti-Corruption Unit) and the UK (Serious Fraud Office). Subject to approval by these authorities, (we) will assess the available information with a view to determine whether there is information which points to crime/s in South Africa ... whether it could be converted into relevant evidence by means of formal mutual legal assistance processes. It is also important to determine from the mentioned authorities what their investigations have revealed and whether the information obtained by them can be shared with the (Hawks)."

He could not predict how long the investigation might take.

Godi confirmed receiving Dramat's letter, saying: "It's a brave and correct decision ... unless justice is being done and is seen as being done on this matter, it's going to continue to cast a cold shadow over the political landscape of the country."

DA spokesman on defence David Maynier welcomed the development, saying: "The Hawks have effectively re-opened the investigation into the arms deal."

Despite several attempts, the Presidency yesterday failed to comment on the development.

Investigations by the UK Serious Fraud Office into BAE's dealings revealed that the arms manufacturer's R1-billion in "commissions" in the South African deal dated back to 1992.

They claimed that among the beneficiaries was FTNSA Consulting, a company linked to former First National Bank chairman Basil Hersov.

Businessman Fana Hlongwane, a one-time adviser of former minister of defence Joe Modise, allegedly received handsome "commissions" amounting to millions from BAE. Hlongwane also worked as a consultant for the arms manufacturer.

News of the Hawks' move came as a court battle continued in the High Court in Pretoria over the financial dealings of prominent South Africans - including some connected to the arms deal - via Ansbacher Bank.

The Sunday Times can reveal that senior ANC national executive committee member and former spy boss Billy Masetlha met former FirstRand CEO Paul Harris in 2009 to try to broker an out-of-court settlement in a 10-year-old case involving FirstRand and the International Tax Law Institute (ITLI).

ITLI founder, international tax guru Barry Spitz, wants FirstRand to open Ansbacher's books on about 500 of its prestigious clients, including Hersov. If this happens, South Africa could find out how much and whether senior ANC leaders received payments related to the arms deal.

The meeting, facilitated by former Denel CEO John Lamola, was held at the Saxon Hotel in Johannesburg in May 2009, a few weeks after President Jacob Zuma was sworn into office.

Masetlha confirmed that he had held meetings with both parties in the dispute, but claimed he was acting as a "concerned citizen", not on the ANC's behalf. He said the case could have economic implications for the country.

"Both sides were interested in my intervention to say ... what should they do in order to avoid a fallout which might ... in our interest as a country ... create a hell of a lot of problems for all of us.

"I am not scared of the arms deal. That dirty linen is neither here nor there. I must say now, as a member of the ANC NEC, that I am not scared of anything on that thing because we are going to shock you in terms of how we are going to deal with it," said Masetlha, without elaborating. However, he did note that the party wanted to avoid having the matter reach court.

Spitz contradicted Masetlha, saying the ITLI had drafted the proposed settlement "with the approval of the ANC", and the ruling party had requested the settlement be kept confidential.

"This was requested by the ANC, which obviously has its reasons for wanting it," he said.

Spitz added that the information sought from FirstRand was of interest to a "vast number of other persons and agencies ... political, financial and corporate, both in South Africa and abroad".

The Sunday Times has seen the proposed settlement document, which Masetlha signed in his capacity as "political head of the ANC Policy Institute".

In it, Masetlha undertook to "personally ensure the destruction of all the confidential information held by the ITLI and/or its privy parties ... and will further, to the extent possible, ensure that no confidential information is retained in any location open to the public, but not under their control".

But Harris, in a letter to Lamola, rejected this proposal, saying: "This is a very complex case and any involvement of outside parties other than our lawyers is not the proper process."

FirstRand spokesman Sam Moss confirmed the meeting between Harris and Masetlha.

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