Yengeni: 'deals on wheels' probe hots up

By Time of article published Jul 1, 2001

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By Jovial Rantao and Marvin Meintjies

The Star has revealed, for the first time, the full list of discounted cars that VIPs such as Tony Yengeni received from a company that will benefit from the multi-billion rand arms procurement programme.

Documents in The Star's possession reveal that all 33 cars were bought from Daimler-Chrysler by the European Aeronautic Defence and Space Company (EADS).

The first car purchase, that of South African National Defence Force chief Siphiwe Nyanda, was made on October 8, 1998. Twenty-three days later, Yengeni's Mercedes ML 320 was purchased.

Nyanda received a 17 percent discount on the retail price of a Mercedes-Benz E320 and a 15 percent discount on an S320. The documents show that Yengeni paid a little over half the retail price for the Mercedes-Benz 4x4 he got at a whopping 48 percent discount through EADS.

The Star can also reveal that Michael Woerfel, managing director of EADS, and some of his staff have been grilled by the Scorpions about the purchases. The Sunday Times reported that Yengeni was grilled for four hours by the Scorpions about the purchase of his vehicles.

The Star's documents show four purchases in which the name of Woerfel is listed as the client. It was not clear why Woerfel needed four Mercedes-Benz cars - an E320 AMG, an ML 320, a C180 and an S320. There were suspicions among those close to the arms deal that he might have made the purchases for other people.

Government sources told The Star that while the discount on some of the cars did not seem outrageous, the fact that they were bought by EADS raised a number of questions.

In two of these transactions made under Woerfel's name, EADS lost money because the cars were sold on to unknown people for less than EADS paid.

Woerfel has refused to say why EADS had sold cars to people like Nyanda and Yengeni at massive discounts and, in the case of Yengeni and others, for far less than EADS itself had paid.

Speaking to The Star from Europe, Woerfel confirmed that he and his staff had been grilled by the Scorpions. "I have been interviewed, we have submitted all documentation and files, I gave statements and so did employees of EADS. But we have an agreement with the investigators that we will not comment until the final results are published."

EADS has admitted assisting VIPs in the sectors of civil aviation, defence, electronic and related industries, and diplomatic and political officials. Assistance rendered included speeding up delivery ahead of the waiting list and discounts on the retail price.

However, the EADS statement, released on April 7 this year, that "notwithstanding these discounts, EADS has profited from the sales of the vehicles", is incorrect.

In Yengeni's case alone, the company made a loss on the sale of the ML320. Purchasing the car for R307 458 and selling it to Yengeni for R182 563 meant a loss of R124 895, and Yengeni got a discount of R167 387 off the retail price of R349 950.

On Sunday night, Yengeni declined to answer questions from The Star. "I don't talk about my car to the press. I only talk to investigators, not to the press, I cannot confirm or deny anything."

Yengeni was chairperson of parliament's joint standing committee on defence when he got the car in October 1998.

According to The Star's documents, EADS ordered cars from DaimlerChrysler only to sell them later to VIPs at less than the discounted price EADS had paid.

In one instance, the list of cars reflects that VIP client "Kunene" was given an ML320 for R255 000.

EADS had bought if for R303 000, thus client "Kunene" received a discount of R48 000.

This is despite the fact that EADS already received a massive discount on the retail and dealer prices of the vehicles.

While DaimlerChrysler South Africa has said the cars were ordered by EADS as staff cars and received the normal staff discount, it appears that in some instances, such as Nyanda's E320 AMG, that EADS paid less than the staff price.

EADS is an amalgamation of several defence and aeronautics companies, including DaimlerChrysler's wholly owned subsidiary DaimlerChrysler Aerospace.

The company has a stake in the arms deal through its stake in Reutech, which won a contract for radar systems.

DaimlerChrysler SA spokesperson Lulama Chakela said: "The price differential (between the normal staff discount and the discount EADS and VIPs paid) means nothing - it is no indication of complicity (on the part of DCSA).

"The purchasing would be done by EADS, and the fact that names appear there is because this information (was recorded) at data capture level.

"There's no way that (the head of DCSA) would know that the car was being sold to Yengeni. (The names are there) because when a sale is concluded, the guys who handled the sale between EADS and DCSA would need to know where the final delivery is, and that is at sales level.

"They do not have to report that higher up, as long as they know the sale has been made and where it (the car) is going. In each instance, EADS would pay us.

"There would be no reason for us to dig to find out what EADS was doing."

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