Special Hearings — Chemical And Biological Warfare Hearings — 1998-07-08

DR KNOBEL: No, it was part - I'll answer that question first if you like but I would like to come back to this TRC10 if you will allow me.  The front companies in my opinion, was correctly described by Doctor Mijburgh, in the sense that those were the companies that were erected with State funds and the State were the beneficiaries of those companies.
 There were a lot of other companies that had been established or been used as private companies by the project and on those companies certain contracts existed. ...[intervention]

MR VALLY: Stop just there.  Used as private companies by the project?

DR KNOBEL: Yes.

MR VALLY: What does that in effect mean?  This was a military project?

DR KNOBEL: No, Mr Vally.  The Defence Force has contracts with numerous private companies that provides technology and provides equipment etc., to the  Defence Force.  The fact that Protechnic was a specialised company in terms of the development of detection apparatus, decontamination apparatus, evaluating masks and filters and so on, obviously made it a primary company for the use of the Defence Force.
 When it was taken over by Mr Zimmer and Mr van Remoortere who also testified here, it was then a totally private company where that type of expertise and, the main client of that company was the Defence Force certainly and the Defence Force had contracts with them.
 What happened then was, Protechnic was considering closing down because the Defence Force requirement was reducing, it was becoming less than what it had been before.  We had established the technology, we had established the state of the art standardisation techniques for masks, filters, decontamination etc., etc.  And they were considering closing down.  
 I then went to Armscor and said we cannot afford to lose this expertise that we have in that company.  I recommended to the Co-ordinating Management Committee that we should persuade Armscor to take over this company.  The New Chemical Weapons Convention makes provision for any country in the world that is a State party to that convention to have what is described in the Convention as a single small scale facility which can continue to do the type of research to keep ahead with the state of the art equipment in terms of masks and filters and decontamination and clothing and that sort of thing.   
 That was what was taking place here.  Armscor had agreed that they would go into a negotiating phase with Mr van Remoortere and they had come to an agreement about the payment and they took over the company and from that moment onwards the company was registered as the single small scale facility of South Africa in terms of the New Chemical Weapons Convention, and was so declared.
 And in fact very quickly after the Convention entered into force, the Convention entered into force in March/April last year, if I remember correctly it was the 28th of April and very soon thereafter the Organisation for the Prevention of Chemical Weapons did an inspection at Protechnic in terms of the requirements of the Convention, gave them a positive report and soon after that, during November of last year, Protechnic transferee to new premises just outside Pretoria as a subsidiary now of Armscor and they were reinvestigated, reinspected by the OPCW and again given a positive certificate.
 So what is reflected here is the process of where I'm being made aware, and Mr van Remoortere spoke to me personally and said: "I'm considering selling this company, I'm not getting enough business and I've lost interest in this area of expertise, what should I do"? And I said: "I will bring you into touch with Armscor and you start negotiating with them".  And this is what is reflected here.

MR VALLY: Well, let's look at 10(b), the issue is this, because it's not so much Protechnic I'm talking
about, I'm talking about front companies and I'm talking about other companies linked to front companies.  Paragraph (b):
"Dat die SAW die kontrak kansellasie van die deel"
 "The contract cancellation of the deal"
of that part of the contract which is not being continued, they'll pay out the balance of the contract, that's what I understand it to say.

DR KNOBEL: There was an outstanding contract that had not been settled yet.

MR VALLY: Yes.

DR KNOBEL: And in the process of taking it over, as soon as it becomes an Armscor company, the relationship between Armscor and the Defence Force is quite different of that between the Defence Force and a private company,  and a subsidiary of Armscor then would do research on a different basis controlled by an organisation called: "The Veenor: Verdedigings Navorsings Ontwikkelingsraad".  And it then becomes part of the Defence Force budget, not a project budget any longer but a normal running ...[intervention]

MR VALLY: I understand all that.  My question still remains, the balance of the contract which as a result of this further take-over by Armscor is outstanding, the monetary value thereof was paid out to the owners of the company?

DR KNOBEL: That's correct.

MR VALLY: Right.  Now having said that, you know we gave a list of - and I'm not sure if a copy of that list was given to you as well ...[intervention]

DR KNOBEL: I've got it here.

MR VALLY: Right.

DR KNOBEL: You're talking about the companies that we considered to ...[intervention]

MR VALLY: That's right.  A large number of them had as directors people who came either from the Special Operations health grouping of Special Forces or from 7th Battalion ...[intervention]

DR KNOBEL: No, no, no.

MR VALLY: I can give you names, I can give you companies.

DR KNOBEL: Yes, but what you're saying: "Special Operations" is not true.  You're using that word incorrectly Mr Vally.

MR VALLY: Alright, you can correct me but the doctors who were working with Special Forces under Doctor Basson ...[intervention]

DR KNOBEL: That I accept yes.

MR VALLY: Fine.  That grouping, all from 7th Battalion of the South African Medical Services or from Project Coast, they were linked at some stage or the other to Delta G or to RRL you know.  Just looking at that list of mine I can tell you at least about Aromed Services, Blackdale, Blowing Rock Controlling Instruments, BR Farming Enterprises, BR Holdings, BSI Medical and Secretarial Services, BSI Medchem, or we're told it doesn't exist, let's leave that one out, Keymed Products Development, Delta G Scientific, DG's Chemic, Decotox, Global Air Charter, Healthman (Pty) Ltd, Infladel, Kowolsky International, Joostenberg Properties, John Truter Financial Consultants, Lifestyle Management (Pty) Ltd, Lifestyle Management Properties, Mason de Medchem, which we were told was a boutique but we later found out it was something else, Medchem Consolidated Investments, Medchem Pharmaceuticals, Medchem Sports International, Midrand Consolidated Investments, Partners in Travel (Pty) Ltd, Poltec Pollutions, Pollution Technologies, Pretocon(?), Pretoria Street Investments, ...[intervention]

DR KNOBEL: Mr Vally, sorry to interrupt.

MR VALLY: Certainly.

DR KNOBEL: I asked you just now if I could to TRC10 and that is exactly why I did so because I knew you were going to talk about this list.

MR VALLY: Sure.

DR KNOBEL: And I'm going to try - I don't know what the question is as yet, but let me just give you the background please.

MR VALLY: Could I just for the record put my list of people.

DR KNOBEL: Ja.