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

DR KNOBEL: Yes.

MR VALLY: And that goes then into Medchem Consolidated Investments.  Did Medchem get a twelve million rand load from Truter Financial Consultants?

DR KNOBEL: The arrow points in the opposite direction Mr Vally.

MR VALLY: Are you saying Medchem ...[intervention]

DR KNOBEL: I'm not saying that, I'm saying the arrow on this diagram, I honestly don't know exactly what that means.

MR VALLY: You see, this document, and this is a 1991 document, signed at a very high level, talks about large amounts of money involving companies surrounding Project Coast and ultimately you were responsible for Project Coast, you were the Project Manager.  At this stage in 1991 you were the manager already.

DR KNOBEL: Mr Vally, we've already established what the role was of the Surgeon General within the Co-ordinating Management Committee.  I've explained to you that there were three sub-committees, one dealt with the financial aspects, one dealt with the security aspects and one dealt with the research and scientific aspects.
 And I've indicated to you that in terms of the financial aspects, the Surgeon General was totally dependant on the Chief of Staff Finance to guide him along with regards to the financial management at this level.  This is why this document that you have in front of you was a document of CSF, Chief of Staff Finance.
 It is true that Basson is here under the: "Enquiries Column" and as I testified I think here, but also to the Office of Serious Economic Offences, the process of privatisation and commercialisation was designed between Doctor Basson and the Chief of Staff Finance and they were supported by the Attorney General's office, I beg your pardon, by the State Attorneys as well as by the Auditor General's office.   And that is the subject of the Office of Serious Economic Offences investigation which is being conducted now.  It is also the subject of the Auditor General's investigation into the fairness or the correctness of the privatisation process.  I can't give you any further information.

MR VALLY: Alright.  Just for the record, besides the thirty seven million rands there's also talk of a further fifteen million rands being channelled, and I'm talking about an option referred to in paragraph 43, sub-paragraph (b)
"Financially the process will result in the nett cash flow to the Medchem Group of fifteen million rands"

DR KNOBEL: Yes.

MR VALLY: And that appears to be in addition to the thirty seven million rands we talked about earlier.

DR KNOBEL: It appears like that.  I'm saying again I think we're possibly over simplifying it.

MR VALLY: And we have this young doctor straight from 7th Battalion, Director of Medchem, subsequently director of Delta G, who in fact, if this is to be believed, this document signed by the various Ministers, made a massive financial killing in 1991 already.  Can we assume that from this document?

DR KNOBEL: I don't know what we can assume Mr Vally, I'm sorry.

MR VALLY: Well, let's go on.

DR RANDERA: General, can I ask at what stage did you become aware of the involvement of all these doctors from 7th Medical Battalion in all these other companies?  I'm not talking about the front companies because they were set up with the various committees that you've described already, but this list that Mr Vally has just provided to you.

DR KNOBEL: Yes, Doctor ..[intervention]

DR RANDERA: Have you only become aware since the investigation started or was there a period prior to that?

DR KNOBEL: Doctor Randera, in 1991, I think we've dealt here with the Counter Intelligence Report on one or two occasions, signed by General van der Westhuizen.  I can't remember which document it was but it was one of the bundle, where I made the testimony that a Counter Intelligence Report was drawn up by the staff of the Chief of Staff Intelligence.  In that document you will see one or two or three of these other companies are investigated, I think Aeromed was one.
 I certainly knew in 1991 that there was an investigation into the so-called Aeromed Services, on the basis that there were links with members of the Project Coast.  After that investigation had been completed I was assured that there was no criminal activities discovered and that the case was closed.   From then onwards I had no further knowledge until I received the first letter from the Offices of Serious Economic Offences in January '93, which is in my bundle here and you will also see what my reply was to that.  In that letter from the Offices of Serious Economic Offences, there are also a number of these additional companies mentioned.  We can go to it if you like but I don't waste time, but not nearly as many as we have on the list now.
 The next step was when we started working closely with National Intelligence.  I explained already how that had taken place and when I began to link up with National Intelligence, not necessarily Mr Mike Kennedy but some of his other colleagues assisted me in helping the Office of Serious Economic Offences in trying to unravel what the position was here.
 I must admit that it was only last year when I visited the offices of National Intelligence that I became aware of a document which I happen to have here, on companies associated or linked in some or other way to Project Coast.  I haven't actually checked it now against this list of Mr Vally, but I believe it is even more than the 102 that are on this list.

CHAIRPERSON: Mr Vally?

MR VALLY: Thank you Mr Chair.
 I need to ask you some further questions on the minutes of the meeting, Annexure J, of the 29th of March 1994, the control committee.

DR KNOBEL: Yes, Sir.

MR VALLY: We've determined that the optical discs we're talking about in paragraph 3 were the discs on which all the  formulae etc., had to be recorded.  Now did you at any stage inspect these discs to see what is on there?