Mac's dodgy millions

Mac's dodgy millions
MZILIKAZI WA AFRIKA, STEPHAN HOFSTATTER and ROB ROSE | 20 November, 2011 02:44

Paper trail leads from arms company Thales to Maharaj and his wife Zarina
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Arms deal terms welcomed PRESIDENT Jacob Zuma's spokesman Mac Maharaj stands accused of receiving millions in bribes from French weapons maker Thales, the company that will be at the centre of the government's arms deal inquiry next year.

A two-month Sunday Times investigation has uncovered a paper trail that leads from the arms company to Maharaj and his wife Zarina.

Schabir Shaik, Zuma's former financial adviser who was convicted of corruption in the arms deal trial, was the conduit used by Thales to channel the money to Zarina Maharaj.

The "missing link" obtained by the Sunday Times is a consultancy agreement, never before disclosed, between Thales predecessor Thompson CSF and Shaik's company Minderley Investments, registered in the British Virgin Islands.

The agreement shows that secret payments totalling 1.2 million French francs (R2.3-million) went from the arms dealer's French bank to offshore bank accounts belonging to Maharaj's wife Zarina just two months before her husband's department awarded the French company a controversial credit card licence tender worth R265-million.

Documents from the Swiss district attorney's office, which obtained court orders for statements of Zarina and Shaik's Swiss bank accounts, show Shaik's company was used as a conduit to channel the Thales money to Zarina's accounts.

It is believed the Scorpions were unable to obtain this agreement, and that this ultimately torpedoed their corruption investigation into Maharaj in 2007.

Investigators believed at the time there was a "reasonable suspicion" the money was destined for Mac Maharaj, according to documents seen by the Sunday Times.

This week Maharaj declined to respond to detailed questions on his wife's secret offshore payments from Thales via Shaik's Swiss bank accounts. "These issues" had been investigated by the Scorpions who "did not bring any charges against either of us", he said.

"Neither Mrs Zarina Maharaj nor I are prepared to subject ourselves to a separate and additional investigation by a member of the media."

On Thursday, Maharaj prevented the Mail & Guardian from publishing a separate story relating to his links with Thales. It involved evidence he gave to a confidential section 28 inquiry.

The Sunday Times first exposed payments from Shaik to Maharaj and his wife in February 2003, when it revealed they had received gifts and payments of more than R500000 from the convicted businessman, including a trip to Disneyland.

The payments were made between 1997 and 1999, while Maharaj was minister of transport. During this time his department awarded a R2.5-billion tender for the N3 toll road between Johannesburg and Durban and a R265-million contract for credit card driver's licences to consortiums in which Shaik's Nkobi Holdings held stakes.

At the time Shaik was also a director of Thales, which owned a 33.3% stake in the Prodiba consortium that won the shady credit card driver's licence deal.

No one has been able to prove a direct link between gifts and payments received by the Maharajs and Thales - until now.

A secret "consultant" agreement obtained by the Sunday Times reveals that Shaik would be paid a fee of 1.2 million francs to negotiate the driver's licence contract with the Department of Transport. Half would be payable when the department signed a letter of intent and the rest "at the coming into force of the contract". The deal was dated July 5 1996, just two months before Maharaj's department awarded the driver's licence tender.

The deal was signed by Alain Thetard - the Thales country manager who also sent a fax to Shaik confirming that his company would pay R500000 a year to Zuma for "protection" during any arms deal probe.

The "consultancy" deal unearthed by the Sunday Times relates to the transport department tenders. It specifies that Thales' company IDMatics in France would pay Shaik's company Minderley Investments' account in Switzerland to "keep our company regularly informed of all operational, financial, technical and commercial matters pertaining to the above business", and to provide "assistance for any negotiation".

Documents from the Swiss district attorney's office, which in 2004 obtained the court order for statements of Shaik and Zarina's Swiss bank accounts, show that Shaik's company Minderley Investments was merely a conduit to channel the Thales money to Maharaj.

The statements show the money was paid from Thales's BNP Paribas account to Minderley Investment Inc's account 95436 at Banque Alliance SCS in Geneva on October 11 1996 and March 11 1997. Each time the transfers from Thales to Shaik's Minderley account are matched days later by Minderley's payments to Zarina's accounts.

On October 11 1996 IDMatics paid Fr600000 to Minderley. Five days later Minderley paid Zarina Fr579999. Zarina then transferred the dollar equivalent - $96000 - to her Isle of Man account number 11444107 at Allied Dunbar bank.

Then, in 1997, there is a similar trail of money. IDMatics paid Fr600000 to Minderley's account at Banque SCS on March 11, and two days later, Minderley transferred the equivalent $100000 to Zarina's Swiss account. Shortly thereafter, Zarina transferred $65000 to her Isle of Man account.

Maharaj's defence that his wife was simply being paid for work she did for Shaik was rejected by prosecutor Gerrie Nel in 2007.

"Further investigation itself revealed a reasonable suspicion that other offences had been committed [by] "Mac" Maharaj [and] Shaik," Nel said in a request for mutual legal assistance to the Swiss authorities in 2007. His letter, addressed to Fridolin Beglinger of the Federal Department of Justice and Police in Bern, concludes that "the defence of Mac Maharaj and Shaik that Zarina Maharaj received money from [Shaik's companies] cannot be true. Why were such huge amounts transferred from the account of Minderley Investments [to] Mrs Maharaj's overseas bank account?"

Contacted this week, Shaik confirmed a "long-standing relationship with the Maharaj family" but declined to discuss the secret deal that allowed Thales funds to be channelled to Maharaj through his Swiss bank account. "I have no comment on that matter," he said.

Pierre Moynot, who headed the South African arm of Thales at the time, refused to discuss the payments. "I am not aware of who paid this or that, so please leave me alone."

In a corruption case in Paris earlier this year, Thales and the French government were ordered to pay a record $920-million fine to Taiwan for paying bribes to push through a deal in 1991 to supply the Taiwanese navy with six Lafayette frigates. As part of the notorious arms deal in South Africa, Thales' predecessor Thompson-CSF was part of the consortium that won the R6-billion bid to supply the navy with four corvettes in 1998.

Thales spokesman Carol Davies said the company would investigate the allegations.

■Maharaj yesterday laid charges against the Mail & Guardian newspaper and two of its journalists.
In a statement, Maharaj said: "Attorneys acting on behalf of Mac Maharaj laid charges against [the newspaper and journalists] for contravening the provisions of section 41(6) of the National Prosecuting Act of 1998."

Maharaj also requested police to investigate whether records of National Prosecuting Authority inquiries had been stolen.

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Censored:
A buried trail of lies
JOHANNESBURG, SOUTH AFRICA - Nov 17 2011 19:30



In a chilling forewarning of what may happen if the Protection of State Information Bill is adopted in its current form, the Mail & Guardian has been compelled to suppress a report about presidential spokesperson Mac Maharaj following a threat of criminal prosecution under the National Prosecuting Authority Act.

The Act makes it an offence to disclose evidence gathered in camera by a section 28 inquiry -- providing for a maximum penalty of 15 years in jail.

After sending questions to Maharaj on Wednesday this week, the M&G received a letter on Thursday from Maharaj's lawyers warning of a potential criminal prosecution if we published the story.

We believe that we have every right to publish the information which raises serious questions about the conduct of the man who speaks on behalf of the president.

However, faced with threats of both civil and criminal action, we have been advised by our lawyers to withhold publication pending an application to the national director of public prosecutions for permission to disclose the relevant material.

We hope that the director, Menzi Simelane, will demonstrate the government's professed commitment to transparency. -- Nic Dawes

'I will take action'
Maharaj reacted to the M&G's questions this week by threatening to take "appropriate" court action unless it undertook not to publish an article about him.

A letter from Maharaj's lawyers, BDK Attorneys, which reached the M&G on Thursday afternoon, contended that the article by senior investigative reporters Sam Sole and Stefaans Brümmer quoted excerpts from an inquiry held under section 28 of the Act.

"We advise you that to the best of our knowledge the [director] has not authorised the disclosure of the inquiry or any part thereof," it said.


The letter warned of "the consequences the use of unlawfully and illegally obtained information had on a publication such as the [British] News of the World".

It said that unless it received an undertaking by 4pm that any information drawn from records of the inquiry would not be published, Maharaj would consider appropriate action against Brümmer, Sole and the M&G.

M&G editor Nic Dawes said the information that Maharaj was trying to keep under wraps was "of vital public interest".

"We have no intention of bowing to his threats."

Maharaj responds
Maharaj released a brief statement on Thursday night accusing the paper of seeking "to hide its complicity in criminal acts by raising the spectre of a threat to media freedom and invoking fears of censorship".

Maharaj said that the M&G could not have attained the documents lawfully and it was "in blatant and wilful contravention of provisions of the Act".

"In the name of press freedom the M&G arrogates to itself the 'right' to break the law that has been on our statute books since 1998. Their editor Nic Dawes acknowledges as much when he states that they will now seek the permission of the national director of public prosecution, Adv Menzi Simelane, for 'permission to disclose the relevant material'. In short they want the NDPP to retrospectively give them legal protection against their unlawful actions," he said.

"Through their sensational and at times distorted reportage they want deflect attention from their wrong doing and depict my upholding of my rights embodied in our laws as a threat to media freedom," he added.

Dawes responded: "Mr Maharaj is simply trying to avoid giving South Africans the answers he owes them. He should stop blustering about the Mail & Guardian and commit to making public the information he is trying to hide."

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The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for all our stories, activities and sources of funding.