The Commission of Inquiry regarding the Prevention of Public Violence and Intimidation has the honour to present a report on the preliminary inquiry into the attempted purchase of firearms by the KwaZulu Government from Eskom.
(Signed) R J Goldstone Chairman
22 April 1994
1.1 On 15 and 19 April 1994, the Commission held a preliminary inquiry into the attempted purchase of 1 000 LM4 rifles from Eskom. The facts which emerged and the findings made by the Commission are contained in this report.
1.2 The following parties were represented at the inquiry:
1.2.1 Eskom;
1.2.2 The KwaZulu Government and KwaZulu Police;
1.2.3 The National Intelligence Service
1.2.4 The South African Police;
1.2.5 J Garb and Co (Pty) Ltd ("Garb");
1.2.6 Gintans Security ("Gintans") and Seyeh International (Pty) Ltd ("Seyeh");
1.2.7 The National Union of Mineworkers ("NUM");
1.2.8 The South African National Civics Organisation ("SANCO")
2.1 For some years Eskom has had in its possession a number of surplus firearms. This state of affairs came about in consequence of certain Eskom installations becoming downgraded from "National Key Points" and the general decrease in the security provided by Eskom for its own installations. The Commission is satisfied that the manner in which Eskom came into possession of the firearms and the reasons for their becoming surplus were legitimate and regular.
2.2 In an attempt to control the firearms, they were all transferred to Eskom's headquarters at Megawatt Park in Sandton.
2.3 Any sales of the arms were required to be arranged by the Corporate Purchasing Manager or alternatively through the Commercial and Legal Departments.
2.4 The arms were under the direct control of Mr Johan van der Walt, the Manager of the National Protective Services Department of Eskom. He had no authority to sell the arms on behalf of Eskom.
3.1 Dr George Lindeque is an executive director of Eskom. On Friday, 25 March 1994, he left his office at 19:00. He went to the parking garage and saw a bakkie and two open lorries. He noticed some unusual features. One was that the vehicles had no registration plates. The lorries did have painted on the doors registration numbers preceded by the letters "ZP". A substantial quantity of LM4 rifles were being loaded onto the lorries. Dr Lindeque was informed that the rifles were destined for the KwaZulu Police.
3.2 Dr Lindeque returned to his office and telephonic enquiries made by him established that the sale or disposal of the rifles had not been approved by the relevant Eskom officials.
3.3 The loading of the rifles was under the control of Van der Walt. Dr Lindeque instructed him to unload the rifles.
3.4 At the time of the loading of the rifles, apart from Van der Walt, also present were Mr Phillip Powell, an official employed by the KwaZulu Government and Mr I Garb, a director of Garb.
3.5 Van der Walt informed Dr Lindeque that he had received a cheque from Garb for R675 000 being the purchase consideration for the firearms. He was instructed to return the cheque to Garb and he did so.
3.6 On 1 April 1994 Eskom issued a press statement. A copy is attached hereto marked "A1". In response, the Commissioner of the KwaZulu Police, Lieutenant-General R P During issued a press statement. A copy is attached hereto marked "A2".
4.1 As mentioned in its press statement, Eskom launched an internal investigation into the attempted arms sale. That inquiry was conducted in an efficient manner. In addition to its internal auditors, the external auditors K P M C Aiken and Peat were also called in to conduct their own investigation into the sales of firearms by Eskom from September 1990 to 25 March 1994.
4.2 It was found that the documentation maintained by Eskom in respect of arms sales was inadequate to ensure completeness, accuracy and the validity of certain transactions.
4.3 Out of the total stockholding of 5 424 firearms, some 48 items cannot be accounted for. In respect of these investigations are still continuing.
4.4 During the period covered by the investigation by the auditors some 416 firearms were sold by Eskom, 243 were sold to Armscor, 117 to dealers and security firms, 46 to individuals and 10 to a subsidiary. Full details of those sales, including the names of the purchasers have been given to the Commission.
5.1 During the preliminary inquiry the following facts emerged and are not in dispute.
5.2 At about the beginning of March 1994 a meeting was held between Mr Phillip Powell of the KwaZulu Government and a Mr Law of Gintans in Durban. Powell mentioned that the KwaZulu Government required urgently to purchase a quantity of rifles. Law so informed one of his directors in Johannesburg, Mr John Sleep.
5.3 Sleep made contact with Garb. The latter had been aware for some time that Eskom had surplus arms for sale. He contacted Van der Walt who agreed to sell 1 000 LM4 rifles to him for R675 000.
5.4 Gintans, through an associate company, Seyeh, entered into an agreement with the KwaZulu Government in terms of which Seyeh sold to KwaZulu 1 000 LM4 rifles. The purchase consideration was R2 100 000. A copy of the invoice issued by Seyeh is attached hereto and marked "B". The date of the invoice is 23 March 1994.
5.5 Garb was requested by Seyeh to apply for an export permit from the SAP. He did so on 24 March 1994. Lieutenant-Colonel Le Roux works in the office at SAP headquarters in Pretoria which deals with permits under the Arms and Ammunition Act (Act 75 of 1969). She did not regard Garb's application as being sufficiently specific as to the purchase of the firearms. She informed Garb accordingly.
5.6 On 25 March 1994, Seyeh sent to Garb a letter of authority signed by Major-General S M Mathe, the Deputy Commissioner of the KwaZulu Police. It was an authority to purchase the rifles. A copy is attached hereto and marked "C". The application was then submitted for a second time.
5.7 Lieutenant-Colonel Le Roux, having regard to the fact that the rifles were destined for KwaZulu, consulted the head of her department, Brigadier W Blaauw.
5.8 Brigadier Blaauw was aware of a Cabinet policy decision affecting the supply of weapons to TBVC and self-governing states. He accordingly contacted the Parliamentary Staff Officer of the office of the Commissioner of the SAP, General J V van der Merwe. The Staff Officer, Brigadier Maritz, referred to a decision of the Cabinet dated 2 March 1994. It reads as follows:
"1.8 Voorsiening Van Krygstuig Aan Tbvc-State En Onafhanklike Gebiede
Die kabinet besluit dat die verbod op die uitvoer krygstuig na die TBVC-state soos wat in die gewone handel verkrygbaar is, nie op nie-sensitiewe wapens en ammunisie van toepassing is nie. Die kabinetsbesluit van 2 Februarie 1994 (item 2.2.3 van die notule) word hierdeur gewygsig".
5.9 Whatever the meaning of the Cabinet decision, Brigadier Maritz decided, (apparently not withstanding the heading of the paragraph), that it did not apply to self-governing territories. He discussed the matter with the Commissioner who was of a similar view. He conveyed that view to Brigadier Blaauw. Brigadier Blaauw thereupon made a note on garb's covering letter and informed Lieutenant-Colonel le Roux that she could issue the permit. She did so. A copy of the Garb letter with Brigadier Blaauw's note is attached marked "D" and the permit marked "E".
5.10 The attitude of the Commissioner of the SAP is set out as follows in his letter (April 1994) to the Chairman of the Commission:
"At the outset I wish to stress that the acquisition of firearms by a police force (including the KwaZulu Police force is not) an uncommon event. I have the highest regard for Lieutenant-General Roy During, the Commissioner of the KwaZulu Police, and am convinced that there is absolutely nothing sinister in his personal involvement in the acquiring of these rifles. As far as the South African Police is concerned, the KwaZulu Polices is regarded and treated in all aspects like any other police force.
The LM4-rifles referred to are semi-automatic rifles for which private individuals may apply for a licence. It is in fact a less dangerous rifle than the rifles normally used by police forces, being automatic R4-rifles. In this respect it must be pointed out that the members of the National Peace-Keeping Force whose training is far more inadequate than that of the KwaZulu Police Force, are all issued with R4-rifles".
5.11 The permit was sent by telefax to Garb. After its receipt, Garb travelled to Eskom in a motor vehicle driven by Sleep. They arrived after Powell and the vehicles of the KwaZulu Police. An employee of Gintans was also present. He had arrived in a 3-series BMW bearing the registration number NVG 131 T.
5.12 It appears that the KwaZulu Police vehicles were irregularly admitted to Megawatt Park on the instructions of Van der Walt.
5.13 Thereafter the loading of the rifles began until stopped by Dr Lindeque.
6.1 Van der Walt was also responsible for an unauthorised sale of 50 LM4 rifles to a Kempton Park arms dealer trading under the name of Shotgun Willies. It appears that 20 of the rifles were delivered not only without authority, but also without payment. In respect thereof false Eskom Removal Permits were made out and signed by Van der Walt. They were also signed on behalf of Shotgun Willies by a Mr Tony Vermaak. Copies are attached hereto marked "F" and "G".
6.2 The details of this transaction are still the subject of investigation by Eskom and the Commission.
7.1. Payment for the rifles was made by the KwaZulu Government to Seyeh. The cheque in the amount of R2 100 000 was deposited into Seyeh's account on 25 March 1994.
7.2 On the same day, 25 March 1994, Seyeh issued a cheque in favour of Garb for R1 070 000. That reflected the price for which Garb sold the rifles to Seyeh.
7.3 Also on 25 March 1994, Seyeh withdrew from its bank account the amount of R850 000 in cash. According to Seyeh's counsel, the withdrawal was made in order to pay Seyeh directors. In this regard it is relevant that Sleep is a director of both Seyeh and Gintans.
7.4 In consequence of the cancellation of the sale of the rifles on 31 March 1994, Garb repaid the amount of R1 070 000 to Seyeh. In turn, on the same day, Seyeh repaid to the KwaZulu Government the amount of R2 100 000. The latter deposit consisted of a cheque for R1 250 000 and banknotes to the value of R850 000. That payment was made at the Rand Show Agency of First National Bank.
7.5 A written agreement of cancellation of the sale was entered into between Seyeh and the KwaZulu Police. A copy thereof is attached hereto marked "H".
8.1 In the Weekend Star of 2 April 1994, it was alleged, inter alia, that:
"Members of the National Intelligence Service might be linked to Eskom's sale of arms to the KwaZulu Police. On March 25, the day the parastatal announced it had uncovered and cancelled plans to sell 1 000 semi-automatic rifles to an arms dealer for resale to the KwaZulu Police, 10 weapons were signed out of Eskom's arsenal and loaded into a truck parked outside Eskom's Megawatt Park headquarters. A source within Eskom said the truck was accompanied by a number of other vehicles, including a grey Mercedes-Benz bearing the registration NVB131T. Senior police sources said this week that the Mercedes was registered in the name of the NIS of a Skinner Street, Pretoria address".
8.2 The reporter, Ms Janine Lazarus, informed the Commission that the information came from a source within Eskom. That source was not named. Together with the car registration number, the Weekend Star was also handed copies of the Removal Permits. ("F" and "G").
8.3 As appears above, the removal permits are not, on the face of it, connected with the sale to the KwaZulu Police. furthermore no vehicle bearing registration NVG 131 T was admitted to Megawatt Park on 25 March 1994. The vehicle which was involved, as already stated, was NVB 131 T, that belonging to Gintans. Evidence on oath was presented by NIS to the effect that NVB 131 T is the registration of a 3-ton Mercedes Benz truck which did not leave the NIS garage in Pretoria on 25 March 1994.
8.4 The facts furnished by NIS were not disputed by any of the parties represented at the inquiry.
9.1 The sale of 1 000 LM4 rifles to the KwaZulu Police was not ordered by the management of Eskom.
9.2 The purported sale was arranged by Mr Johan van der Walt, an employee of Eskom, without authority.
9.3 The Commission is unable to ascribe a motive or motives to Van der Walt which would explain his actions in attempting to sell the rifles.
9.4 The KwaZulu Government and KwaZulu Police appear to have acted openly in relation to the purchase. However, counsel for the KwaZulu Government was unable to inform the Commission whether normal procedures were followed with regard to the purchase. Whether this is a matter which requires further investigation is not a matter which concerns this Commission.
9.5 The Commission is satisfied that the National Intelligence Service had nothing to do with this matter. In particular the vehicle referred to in the Weekend Star of 2 April 1994 was at no relevant time at the Eskom premises.
9.6 It remains unresolved why the Commissioner of both the SAP and KwaZulu Police were under the impression that an export permit was required under the Arms and Ammunition Act, 1969. So, too, the relevant department at the SAP Headquarters in Pretoria. That became an issue in the light of the submission by counsel for the SAP that, in terms of the Arms and Ammunition Act, no permit is required in respect of arms deliveries to a self-governing territory. It is not necessary now to resolve that issue.
9.7 In any event the permit was issued after consultation with the Commissioner of the SAP. The Commission can only regard it as unfortunate that the Commissioner did not refer the matter to the Minister of Law and Order before allowing the permit to be issued. In this regard it is relevant that this Commission reported in December 1993, that there was evidence of at least one hit squad operating within the KwaZulu Police. furthermore, only a week prior to the issue of the permit this Commission reported that there was Prima Facie evidence that officers of the SAP were involved in the illegal deliver of firearms to KwaZulu. The potential for increased violence in KwaZulu was a matter of daily concern t the time. In these circumstances, the failure by the Commissioner to have realised the sensitivity of the matter and to have treated it accordingly is a disturbing aspect of this matter.
9.8 Counsel for Gintans and Seyeh submitted that the Commission should make a positive finding that his clients did nothing untoward. He argued that they acted openly and lawfully and that they were entitled to make whatever profit they could. The problem, however, at this stage, arises from the fact that:
9.8.1 there is still a question to be resolved as to the role played by Van der Walt;
9.8.2 there is the unusual and inadequately explained withdrawal in cash of R850 000 by Seyeh from its bank account; and 9.8.3 there was no good commercial reason suggested for interposing Seyeh between Gintans and Garb.
9.9 As far as Garb is concerned the only question which remains unresolved is the relationship between it and Van der Walt.
10.1 The financial aspects of the transaction, while disturbing from a public point of view, are of no concern to this Commission. Whether they require further investigation is a matter to be considered by the appropriate authorities.
10.2 The Commission commends the action of Dr George Lindeque in putting a stop to the transaction and in having initiated the immediate and full investigation by Eskom. The Commission's gratitude is expressed to the many Eskom officials who assisted in this inquiry.
10.3 If the facts call for it, the Commission will investigate the purported sale of 50 LM4 rifles to Shotgun Willies.
10.4 In due course the Commission will receive a final report from Eskom dealing with the few matters which remain outstanding.
1. The chief executive of Eskom, Mr Allen Morgan, today informed the Goldstone Commission and the South African Police about a cancelled transaction involving the sale of 1000 semi-automatic rifles from Eskom to an arms dealer.The deal was cancelled before delivery took place when it was discovered that the dealer intended to sell the weapons within South Africa.
The weapons were originally acquired by Eskom in terms of its obligations under the National Key Points Act. The Act has subsequently been relaxed and surplus weapons were being disposed of.
The transaction was to have taken place in terms of an export permit issued by the South AFrican police according to the Arms and Ammunition Act.
2. The transaction was cancelled by senior management when it became clear that the weapons were destined for a customer within South Africa, in this case the Kwa Zulu Police.
Mr Morgan decided that the Goldstone Commission and South African Police should be informed of the circumstances surrounding the cancelled transaction.
It has been decided that because of the sensitivity surrounding weapons, an internal investigation will be conducted into the circumstances of the transaction. This will be done in close collaboration with representatives of the Goldstone Commission and the South African Police. They will be assisted by specialist forensic auditors from the firm of KPMG.
3. Members of the Eskom Protective Services who were involved in the transaction have requested to be relieved of their duties pending further investigations.
4. An audit of Eskom's main armoury at Megawatt Park this week revealed that all automatic rifles are accounted for. A countrywide audit of Eskom armouries is continuing.
Further enquiries: Kevin Morgan 011 - 463 2638 - home 011 - 800 2274 - office
The Kwa Zulu Police have taken note of the Press Release by Eskom and the South African Police concerning the cancelled arms transaction between Eskom and the Kwa Zulu Police. We find it ludicrous that any publicity should be given to this matter, and in particular, that any sinister connotations should be ascribed to, what is considered by us, as an ordinary aboveboard business transaction. I say this for the following reasons:-
1. The negotiations for the purchase of the firearms were conducted through the auspices of a company representing Eskom, who we considered to be ESKOM'S duly authorised agent, and such negotiations were conducted in accordance with normal business practice. At no stage did the Kwa Zulu Police conceal their identity as the purchasers and the negotiators for both parties were, at all times, fully aware of all the circumstances surrounding the transaction. It would appear however from the press statement by Mr Morgan that ESKOM'S senior management were unaware of the details of the transactions. As they were represented at all times by an agent, being an authorised weapons dealer, the Kwa Zulu Police are in no way to blame for this and we reject any insinuation that the transaction was clandestine.2. An application for an export permit was made as this is a prerequisite in terms of the Arms and Ammunition Act where arms are supplied to a self-governing territory. From the press release by the S A Police, it is clear that the application was accompanied by a letter from the Commissioner of the Kwa Zulu Police.
3. The company representing Eskom were paid in full by an official Kwa Zulu Government cheque following the issue of an official order form, and upon receipt of the appropriate invoice. The cheque was duly accepted and deposited by the agent representing Eskom. Although the Kwa Zulu Police considered the cancellation of the transaction by the seller as a contractual breach, the Kwa Zulu Police considered representations made by senior Eskom officials to the effect that they regarded the matter as a politically sensitive one and accordingly agreed to cancel the transaction. A refund cheque was received by the Kwa Zulu Police on the 31st March 1994 and official notification of the cancellation of the transaction was given by the Kwa Zulu Police to Eskom on the same day.
I am compelled to conclude that Eskom management fear some form of reprisal arising from these events and in a pathetic attempt at exonerating themselves from any blame for daring to deal with the political adversaries of the ANC, they have now requested the Goldstone Commission to investigate this matter. I believe that the Goldstone Commission has far more important issues at hand with which they should be presently occupied, other than to sensationalise a matter such as this.