Mbeki received millions in German defence deal - report

Other News Materials 3 August 2008 06:52 (UTC +04:00)

South African President Thabo Mbeki was allegedly involved in a multi-million dollar kickback scheme over the 1999 submarine deal with a German shipbuilding giant, the Sunday Times newspaper reported Sunday.

The Times presented the findings of what it said was a six-month investigation which showed that the company, identified as MAN Ferrostaal, had allegedly paid 30 million rand (4.1 million dollars in current exchange) to Mbeki to guarantee it would receive the hotly-sought contract, the dpa reported.

The Times quoted a secret report compiled in 2007 by a British consultant, commissioned by an unnamed Central European manufacturer to investigate MAN Ferrostaal which had launched a hostile takeover bid against it .

According to the Times, Mbeki gave 2 million rands of the money to current Vice President Jacob Zuma and the rest to the ruling party, the African National Congress.

The report was published as Zuma faces a fraud and corruption trial in connection with alleged taking of bribes from arms dealers. Court proceedings were expected to take place this month.

In a separate 1994 South African deal to purchase four German-made warships, or corvettes, German prosecutors are also investigating alleged kickbacks for South African officials.

The company in question, ThyssenKrupp, part of a German consortium that produced the corvettes, confirmed in April that they had paid an African intermediary 22 million dollars for "the usual commissions" but said they had declared it in their contract and there was no evidence of corruption.

In that deal, the post-apartheid government in South Africa decided in 1994 to buy new warships, but the German consortium was scratched from the five-country shortlist of suppliers in December of that year.

By that point, only British and Spanish suppliers were left in the race. But four weeks later, the Germans suddenly came back onto the shortlist, with then-vice president Mbeki announcing during a visit by a German minister and businessman that the issue was wide open.

The Germans then moved to the front in a complicated tendering procedure and an order for the four warships was signed on December 3, 1999.

The decision was criticized 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, according to the German news weekly, Der Spiegel, in April.