RESPONSE TO THE MAIL AND GUARDIAN - CONGO BRAZZAVILLE Original: I am a journalist with the M&G Centre for Investigative Journalism. We write for the Mail & Guardian newspaper in South Africa, but in this instance we are also collaborating with the International Consortium of Investigative Journalists (ICIJ) on an international project that examines the activities of companies and individuals conducting business through the British Virgin Islands. As part of the ICIJ project, we intend to publish a story shortly (in the M&G and elsewhere) that examines payments flowing through BVI entities from the sale of Puma helicopters to Congo-Brazzaville in 1997. At the same time the country suffered from a civil war. Exotek Management Services and businessman Rudolph Wollenhaupt purchased 28 helicopters from Armscor in 1997. Four of these were to be overhauled by Denel Aviation and onward sold by Exotek, via private military company Support Services Corporation (SSC), to Congo-Brazzaville. Armscor received $7.7m for the Pumas, and payments flowed through Exotek, but the helicopters appear not to have been delivered. In 2002, according to media reports at the time, the Congo Brazzaville government approached Armscor demanding that the $7.7m be repaid as the helicopters had not been delivered. According to an article in "The Star": "On July 23 this year (2002), (Congo-Brazzaville's) lawyers served a letter of demand on Sipho Thomo, the Chief Executive of Armscor. In the letter, the lawyers demand repayment of $7,7-million (about R80-million). They say Armscor has become unjustly enriched at the expense of the Congo-Brazzaville government." We hope Armscor can help us by clarifying certain of the above facts, commenting generally and responding to the following allegations and questions: * How does Armscor respond to the allegations that it was inappropriate for it to sell military equipment destined for a region suffering from a civil war, and that it was inappropriate for it to be doing business with a private military company such as SSC (which was connected to Executive Outcomes)? Presumably Armscor's transaction was subject to NCACC approval - can you clarify? Response: The contract was between Armscor and Exotek Management Services Limited, which was later purchased by Support Services Corporation. The National Conventional Arms Control Committee (NCACC) approved the sale. * How did Armscor respond to Congo-Brazzaville's claim in 2002 that the company was "unjustly enriched at the expense of the Congo-Brazzaville government"? Response: Armscor engaged with the legal representative of Congo-Brazzavile in South Africa and explained that Armscor did not enter into any contract with Congo-Brazaville in this regard. The funds received were in respect of the contract between Armscor and Exotek for which Armscor has delivered in terms of the provisions of the contract. * Which person or entity transferred the $7.7m to Armscor in 1997? Response: The funds were received from the Republique Du Congo as payment in respect of the contract between Exotek and ARMSCOR. * What was the outcome of the 2002 court application by Congo-Brazzaville for a refund from Armscor? Response: The matter was withdrawn by the Plaintiff following discussions between Armscor and their Legal Representative. The matter was therefore never heard in court. * Is Armscor aware of the ultimate fate of the 28 helicopters purchased by Exotek and Wollenhaupt - particularly the four that had been destined for Congo-Brazzaville? Response: The helicopters were delivered to Denel Aviation upon the written instruction by Support Services Corporation / Exotek in terms of the provisions of the contract. Any further enquiries on this matter can be directed to Denel. END