2 July 2006

South Africa: Germany Probes Alleged Kickbacks in SA Corvette Deal

Johannesburg — AUTHORITIES in Germany are investigating alleged kickbacks of millions of rands arising out of the sale of four corvettes to South Africa.

Peter Lichtenberg, a spokesman for the prosecutions authority in Düsseldorf, Germany, confirmed that an investigation was under way into the ship-building consortium that supplied the corvettes -- which have already started arriving in South African waters.

Lichtenberg was reluctant to release more details as the probe was still under way, according to information obtained by the Sunday Times yesterday.

The corvettes were ordered in an arms deal that has been mired in controversy since allegations of corruption first surfaced in 1999.

The German news magazine Der Spiegel is due to hit the streets tomorrow with an in-depth report uncovering suspected "irregularities" surrounding the corvette deal. The publication estimates that up to R137-million was paid in bribes and concealed in the ship builders' accounts as "expenses".

It was unclear last night who had received any of the alleged kickbacks under investigation.

Klaus Pepperhoff, a spokesman for the Thyssen group which led the ship-building consortium, confirmed in a statement to Monitor -- an investigative magazine show on German television -- that raids had been conducted on a number of offices linked to the consortium.

The raids were carried out following "suspicion of illegal payments" regarding the corvettes ordered by South Africa.

The Thyssen group was co-operating with German authorities and the kickbacks probe would focus on staff who were employed by the company at the time of the arms deal in the late '90s, it was reported.

Sapa reports that, according to Der Spiegel, the post-apartheid government decided in 1994 to buy new warships, but the German consortium was scratched from the five-country short list of suppliers in December of that year.

UK and Spanish suppliers were left in the race -- but the German bidders, in an about-turn, became the front runners in a complicated tendering procedure. An order for four warships was signed in 1999.

The decision was criticised in South Africa, with an inquiry concluding in 2001 that the Germans should have been eliminated in the first round for failing to meet several requirements.

Several prominent South Africans have been caught up in the arms deal controversy, including former ANC chief whip Tony Yengeni, Durban businessman Schabir Shaik, and former Deputy President Jacob Zuma.

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