Arms deal investigators probe BAE payments to South African (Guardian)

Arms deal investigators probe BAE payments to South African


Official was linked to minister who helped firm win £1.5bn jet order

Chris McGreal in Johannesburg
Saturday January 6, 2007
The Guardian

The Serious Fraud Office is investigating "substantial payments" made by BAE Systems
to a senior South African defence ministry official who had influence over a £1.5bn
contract won by the arms company to supply planes at nearly twice the price of a
rival bidder.

Last night it emerged that South Africa's organised crime unit, the Scorpions, was
handling a "mutual legal assistance" request from the SFO to investigate the financial
accounts of Fana Hlongwane, a politically well-connected businessman, in relation to
the 1999 deal. Mr Hlongwane is a former special adviser to the then South African
defence minister, Joe Modise, who died in 2001.

Mr Modise has been named in allegations of corruption, including claims that he took
a £500,000 bribe from BAE and $10m from a German consortium that signed a contract
to sell submarines. The SFO is also investigating John Bredenkamp, a tycoon who is
BAE's agent in southern Africa and whose UK home and offices were raided in October.

South African sources said yesterday that SFO detectives were expected to travel
to Pretoria within weeks.

Details of the investigation emerged soon after the UK government abruptly halted
an SFO inquiry into alleged bribes paid by BAE to Saudi royals.

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