Summary of warrants against BAE Systems and BVI-registered Red Diamond
Further investigation is to be made into the network of companies (including BVI-registered entities) linked to African National Congress , as well as into a great number of industrial offset programmes that have become a good ground for corruption. It is suggested that recent closure of the Directorate of Special Operations (the Scorpions), which investigated organised crime and corruption in South Africa, was connected to their work on the arms deals with the British defence company and arms manufacturer BAE Systems.
Two months before their closure they launched a series of simultaneous raids at seven locations in three South African provinces, all of them related to the bribes paid by BAE Systems and related to the South African deal. The search warrants, obtained on suspicion of racketeering, corruption, money laundering and fraud, identify three sets of suspects associated with corruption in the deal. The first of them is BAE, its officials and front companies, including its head office marketing services and the BVI-registered Red Diamond, others include middlemen, among them the shady Zimbabwean businessman John Bredenkamp, and unnamed officials and agencies of the South African government.
Actually, the seach warrants were supported not only by evidences found by the Scorpions but also from the evidences found by the Serious Fraud Office (SFO). One of the warrants stated that there is a “reasonable suspicion that BAE devised a system of payments… designed as bribes to achieve success… and to seek to obtain undue advantage over its competitors in the bidding process”.
The SFO suspects that BVI-registered Red Diamond was created with the purpose to ensure that corrupt payments could be made, and to make it more difficult for law enforcement agencies to penetrate the bribes system. Also, according to the SFO investigation, payments to some middlemen were made through BAE itself, a South African company established by BAE and Saab to manage their offset obligations, the BVI-registered Arstow Commercial Corporation, and the Jersey-registered Commercial Corporation International (CIC).