Special Hearings — Business Hearings — 1997-11-11

DR RANDERA: Father, just one question.  Mr Hayward I want to take you back to your point about front companies and just remind you of the 1991 American court case, which was finally settled in 1997 I understand at a great cost to Armscor.  What that case showed was that there were, that Armscor was involved in sixty seven counts of conspiracy abroad, money laundering and tax evasion.  It involved countries like China, Irak, and in some centres the issue came up in the Cameron Commission again.  Now clearly Armscor must have looked at that, as an example of what the organisation was involved with in the past and I really want to ask this as a question looking on the future, because earlier on you said about the transparency that Armscor is involved in now.  As part of that transparency, is there a role now for these, whether they were secret groupings or not, do you still function in that way?

MR HAYWARD: Dr Randera, it's so nice to tell you that there's not a single front company around.  They've all been wound up.  They've all been audited.  In fact another thing that I didn't mention which we're also pleased about; we've just changed our auditing group of which we given 50% of the audit to a black group and there not too many major (unclear) who've done it, and that again is part of transformation, you're bringing in new auditors.  So when you talk about the past, I'm bringing in new players from the future.  We are considering even those aspects to say well, there's no front companies, we don't have any.  We don't have middlemen neither.  We don't have them, sometimes middlemen are used by the manufacturers.  Remember we don't sell the product.  But they do sometimes use middlemen, yes; but even in that, more and more there's government to government business.  If we come in, we come in only if it's a government to government deal, that's all.  We don't pay our people.

CHAIRPERSON: I just have one, I don't usually ask questions because these people are very competent.  I wonder whether it is an appropriate question, that relates to the sale of arms; because many of us are deeply concerned about the armaments industry and have been gravely exercised by the fact that we having got to a democratic dispensation, reasonably peacefully, have been involved in the sale of arms to Ruanda, Sudan and so forth; and to other parts of the world whose human rights records are to say the very least dubious.  What happened, I mean where are you about this, because we think it is something that is an embarrassment really to as I have done (unclear sentence) where strife and turmoil were happening and you hear people say, well these arms have come from South Africa.
MR OMAR(?): Mr Chairman, I think it is obviously a very important question for the whole of South Africa to be addressing it all of the time.  At one level, I think we must clarify that, Armscor at this point has no control whatsoever over any decision that the National Convention Arms Control Committee would take on who receives the exports from South Africa.  I know quite often we've been approached by media organisations and other NGO's and so forth for comment and we'd be surprised ourselves that a certain deal is going through or has reached an advanced stage, because we are that far out of the loop at this point in time.  So I think whatever comment we'd make would obviously then have to be at a personal level and at,  at a personal level for myself, I would say that the kind of controls that the South African government has institute under the chairmanship of Minister (name unclear) and the National Convention Arms Control Committee are probably the best in the world.  They obviously could do with a greater deal of transparency, they could do with a greater deal of accountability.  I think it's at that level.  It's at the level of governments control over arms exports that we'd have to address this.  But we as a corporate organisation as a corporate structure have absolutely no say now over such decisions.

MR HAYWARD: I think Mr Chairperson, they've also taken a decision now to destroy all our small arms, that we've got surplus stocks of.  That's been taken.  So I think there's a consciousness, the fear you have and the concern we have, I think it's shared by everyone.  But you know they're very difficult, there have been so many floating around this region, from so many countries.  It's almost an impossible task to know what's going where.  But I can tell you this; I don't pick up that there's arms traders that I know of, but they've got to be obviously, but they're not major groupings.

CHAIRPERSON: Thank you very much.  We are grateful to you for having come, I had a wonderful speech for when you had not come ...

MR HAYWARD: I spoilt it

CHAIRPERSON: But thank you very much.  Fabcos?  Would you apologise for the fact that you're coming; actually it's not so bad, not so bad; we've done quite well actually.  I thought maybe you'd clapp me for having got this thing moving, so that by now we are on the last but one.  Oh, it's not quite as good; no, don't let me.  Thank you very very much Dr Boraine.

DR BORAINE: My own word of welcome.  It's very good to see you, and I assume you are leading the delegation and I would be grateful if you would introduce your team to us now please.

MR TSHWANGANE: Thank you very much Mr Deputy Chairman.  I would like to start by introducing our founding father of Fabcos on my left, Mr Joas Mokghale, next to him I'll introduce one of our leading ladies in the hairdressing fraternity, Mrs (name unclear) Ramo (?).  On my right I have the leading person in our (unclear) association, Mr S Mokgwatsane and yours truly the president of Fabcos, Reggie Tshwangane.

DR BORAINE: Again, a very warm word of welcome; I'm tempted to ask you to stay behind, not you, but the hairdresser and the taverna.  I need help in both areas.  Would you take the oath or the affirmation?

MR TSHWANGANE: The oath.

DR BORAINE: All of you will take that?

MR TSHWANGANE: Yes.

DR BORAINE: Please stand then. Dr Boraine administers the oath.

DR BORAINE: Do you have a presentation you'd like to make before we have the question time?

MR TSHWANGANE: Yes, I think we have a presentation to make, before question time.

DR BORAINE: Please go ahead.