Chippy Shaik.  Picture: SUNDAY TIMES
Chippy Shaik, left, leaves the Durban High Court with brother Shabir. Picture: SUNDAY TIMES

SHAMIM "Chippy" Shaik, who headed the Department of Defence’s arms acquisition programme, denied before the arms commission on Monday that he left the department in 2002 in controversy.

Mr Shaik was adamant that his departure was amicable and that no adverse findings were made against him relating to the arms deal.

The commission is probing the controversial 1999 deal to acquire R30bn worth of arms.

Mr Shaik denied there had been any conflict of interest with his brother Schabir Shaik’s company, African Defence Systems (ADS).

ADS was awarded the contract to supply combat systems for the frigates in the arms deal.

Richard Young, MD of losing bidder C2I2 Systems, had accused Chippy Shaik of playing an improper role in the selection of the contractors for the combat suite because his brother Schabir Shaik had a direct interest, as director and shareholder in ADS and Thomson-CSF (Southern Africa).

"I have always maintained that I disclosed … my potential interest/ bias that could arise in respect of the combat suite," Mr Shaik said in his statement to the commission.

The former trade and industry minister Alec Erwin had publicly referred to his disclosure, he said, adding that he had submitted letters from the then minister of defence, Joe Modise, the chief of the South African navy and the CEO of Armscor acknowledging his voluntary disclosure of possible "conflict".

"I subsequently sought a legal opinion on this issue, which confirmed that I had no conflict of interest in the procurement process and had disclosed my brother’s business interest with Thomson SA and recused myself from any decision relating to the combat suite," Mr Shaik said.

Rear Admiral Jonathan Kamerman, who was the project officer for the acquisition of patrol corvettes for the South African Navy, testified earlier this year that Mr Shaik had indicated in December 1998 that he had a possible conflict of interest and that he would recuse himself from any decision that was taken on the combat suite.

R-Adm Kamerman said whenever the combat suites were raised in meetings of the Project Control Board, which regulated procedures during the contract-negotiation phase of the arms deal, Mr Shaik had left the room.

Mr Shaik also said he had no authority to approve or disapprove any of the acquisition programmes. His role had simply been to manage the acquisition process in the department of defence.

"The final decision rested with Cabinet, and the minister of defence was the overall custodian of the defence acquisition programme," Mr Shaik said. Contrary to media reports, he had left the department with a clean slate.