'Chippy' Shaik denies leaving Defence Department under a cloud

SHAMIM "Chippy" Shaik, testifying before the arms deal commission yesterday, denied leaving the Defence Department in 2002 shrouded in controversy.

Shaik, who headed the department's arms acquisition programme, was adamant his departure in April that year was amicable and no adverse findings were made against him. Shaik denied any conflict of interest with his brother Schabir's company African Defence Systems (ADS).

ADS was awarded the contract to supply combat systems for frigates.

Richard Young, managing director of losing bidder C2I2 Systems, had accused Shaik of playing an improper role in the selection of the contractors for the combat suite because Schabir had a direct interest, as director and shareholder in both ADS and Thomson-CSF (Southern Africa).

"I have always maintained that I disclosed ... my potential interest/bias that could arise in respect of the combat suite," Shaik told the commission.

He said former Trade and Industry Minister Alec Erwin had publicly referred to his disclosure.

"I subsequently sought a legal opinion on this issue, which confirmed that I had no conflict of interest in the procurement process and had disclosed my brother's business interest with Thomson SA and recused myself from any decision relating to the combat suite," Shaik said.

Rear Admiral Jonathan Kamerman, who was the project officer for the acquisition of patrol corvettes for the SA Navy, testified earlier this year that Shaik had indicated in December 1998 that he had a possible conflict of interests and would recuse himself from any decision taken on the combat suite.

Shaik also said he had no authority to approve or disapprove any of the acquisition programmes.

"The final decision rested with cabinet and the minister of defence was the overall custodian of the defence acquisition programme."

Contrary to media reports, he had left the department with a clean slate, Shaik said.

While he was at the department, there had been two investigations into the arms deal, starting with the auditor-general's 1999 investigation and the joint investigating team.

"I remained in the employ of the Department of Defence until all these investigations were completed. No adverse findings were made against me," Shaik said.

The commission continues today. - Ernest Mabuza