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S.African Police Arrest Third Suspect in Illicit Arms Deal - 2001-11-16

South African police have arrested a third person in connection with a controversial multibillion-dollar arms deal. The arrest comes a day after investigators presented a report to parliament, clearing the government of wrongdoing in the deal.

Police arrested defense company executive Schabir Shaik on theft charges. He was released on bail of a little more than $100.

Mr. Shaik is accused of possessing confidential government documents linked to the multimillion-dollar weapons procurement at the center of a year-long scandal. Police say simply possessing those documents is a crime under the Protection of Information Act.

The question now is where he got them. A police spokesman said the accused must explain that in court.

Schabir Shaik is the brother of senior defense department official Chippy Shaik, who heads South Africa's military acquisitions program.

Schabir Shaik is also on the board of directors of two different defense contractors, which received lucrative contracts in the arms deal. His brother Chippy was involved in awarding those contracts.

The arrest of Schabir Shaik comes a day after police made public the results of their investigation into allegations of corruption surrounding the arms deal.

The report blasted Chippy Shaik for failing to excuse himself from procurement decisions involving his brother's companies. But prosecutors have indicated that despite his conflict-of-interest, they have no grounds on which to prosecute Chippy Shaik.

But that was before the arrest of his brother. Police say Chippy Shaik would have had access to the classified government documents found in his brother's possession. But they refuse to say whether that makes him a suspect.

After Schabir Shaik appeared in court in Durban, he told reporters he hopes there will be no further arrests. Police, however, have not ruled that out.

Schabir Shaik is the third person to be arrested in connection with the arms deal. The former head of Parliament's defense committee, Tony Yengeni, has been charged with fraud. So has a European defense company executive, Michael Woerful.

Prosecutors say some government officials used the arms procurement process for personal gain. But they also say corruption on the part of a few officials did not affect the outcome of the deal. The probe exonerated the government itself from any wrongdoing.