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Sun Sep 25 22:50:53 CAT 2016

Arms and the man who would be king

STEPHAN HOFSTATTER, ROB ROSE and MZILIKAZI WA AFRIKA | 27 March, 2013 09:43

Arms dealer Ivor Ichikowitz, regarded as being close to several ANC heavyweights, including President Jacob Zuma, is poised to buy an ailing hi -tech weapons manufacturer in a deal that would make him the most influential supplier of combat and peacekeeping hardware on the continent.

The Sunday Times has established that Ichikowitz - who was linked to entities investigated for arms control violations and attempted bribery - will bail out Advanced Technologies & Engineering (ATE).

But Ichikowitz, in an interview with the Sunday Times, rejected the label of "lord of war", sayinghe was in the business of "protecting democracies".

"There are those who play the 'lord of war' game, but one of the reasons I'm in this business is to push those people out," he said.

The role of his company, Paramount, was to bring peace and security to Africa, he said .

"We choose who we do business with very carefully. I'm doing this because I want to make a difference."

He saidParamount had never broken any arms control laws or sold weapons to dictators.

ATE, which designed hi-tech weapons and navigation systems for the Rooivalk attack helicopter and the Hawk fighter trainer jet, faced being liquidated by creditors, including Eurocopter and Investec bank, for debts of some R300-million. The bailout of ATE, details of which are being kept under wraps, will give Ichikowitz's company unprecedented access to some of the most advanced weaponry in the world.

The bailout could revive ATE deals worth billions to upgrade Russian and Chinese jets and helicopters with Western laser guided-missile and night-vision capabilities to be sold to African and Middle Eastern clients.

It will also give Paramount access to ATE contracts with the South African military, including the Hawk fighter trainers, communications systems for Oryx helicopters and drones.

Paramount is understood to be mooting the acquisition of a hi-tech shipbuilding firm too.

ATE chairman Jean-Marc Pizano said he was "not at liberty to discuss the business affairs of ATE" because his company was "under supervision in business rescue".

Ichikowitz said the deal was as good as done, pending the approval of ATE's creditors. "This is a good-news story. ATE is a real jewel, a national asset. This company cannot be allowed to fail."

The deal will bring together companies belonging to two of the most controversial figures in the South African arms industry.

Pizano, a French engineer who worked at the Mirage fighter jet manufacturer Dassault, set up ATE in Pretoria in the mid-1980s, raising suspicions that he had helped the apartheid government circumvent sanctions.

He was later accused of introducing Schabir Shaik to key players in the French arms industry and helping him to set up the Nkobi group of companies, an alleged front of the ANC.

He won a court battle last year when he rejected a plan proposed by a business rescue practitioner, Karl Gribnitz. But in court papers Gribnitz accused him of running the company as a "Ponzi scheme" by using money advanced for certain projects to pay unrelated costs, including those of his lavish lifestyle.

He said allegations that he had looted his company were "absolutely not true" and that ATE's financial crises stemmed from major contracts falling through.

According to court papers, these included a R5-billion deal to equip cheap Chinese jet fighters made in Pakistan with French missiles, and a R2-billion deal to upgrade 40 Russian transport and attack helicopters with Rooivalk-style guided missiles and cannons.

Pizano denied involvement in apartheid sanctions-busting or arms-deal corruption. He had been to Malaysia with Shaik several times to "explore business opportunities in the field of avionics integration, [but] did not entertain any other dealings with Shaik".

Ichikowitz attracted the most controversy for reportedly partnering with Sandi Majali's company, Imvume, an alleged ANC front company, when it was involved in the oil-for-food programme with Iraq.

Majali was later found to have paid bribes for oil allocations from Iraq. Imvume was found to have diverted an R11-million payment from the state oil company, PetroSA, to the ANC to fund the 2004 elections.

Meanwhile, two Ichikowitz companies, The Virlean Initiative (TVI) and Mechanology Design Bureau (MDB), were accused in a 2005 investigation commissioned by the Defence Department of entering army bases and stripping armoured vehicles without authorisation and violating arms control rules in exports to several countries, including Angola and Ghana.

In one incident, an MDB official dropped off "a gift comprising a weekend breakaway and cash, amount unknown, to my private abode", according to a sworn statement by an army colonel.

The report, by First Consulting, recommended that TVI's and MDB's offices be raided and that Paramount be investigated. But no further action was taken after a parallel investigation commissioned by Armscor apparently cleared all parties.

Armscor failed to supply the Sunday Times with the report by forensic accountants Gobodo, despite repeated requests.

Ichikowitz companies were also cited in a 2007 business proposal, seen by the Sunday Times, for a mining venture in the war-torn eastern Democratic Republic of Congo with the Makabuza family, whose members have been accused of illegal arms trading and funding a rebel group charged with war crimes.

Ichikowitz dismissed this as a "desperate attempt to dig up dirt to smear my good name".

The First Consulting investigation was prompted by squabbles between the Defence Department and the Armscor board, he said. The allegations against Mechanology "were investigated and found to have no substance".

The Congo proposal was made independently by his mining team. "After the team had done a due diligence, it was decided not to proceed, and to end all involvement with the DRC."

He said that there was nothing untoward about being a "vocal supporter" and funder of the ANC. "But this was never conditional. Majali was part of the fundraising structures for the ANC and I was helping out. I never hid it."

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