End of the road for major SA helicopter deal case

After decades of litigation, a multimillion-euro claim against South African state arms manufacturer Armscor will reach its conclusion in Lisbon’s civil court in November. A Portuguese arms agent, Jorge Pinhol’s company, Beverly Securities Companies, in 2008 instituted the claim for €192m against Armscor for his alleged role to accommodate a helicopter deal at a time when SA was still under an arms embargo. BusinessLIVE reports that Pinhol alleges he played a pivotal role to establish a clandestine Portuguese channel during the 1980s for transportation of 50 Oryx helicopters in kit form to the country. The SA Air Force (SAAF) at the time desperately needed medium transport helicopters for the border war in Angola. Dubbed Project Adenia, the idea was to develop a hybrid between the old Puma helicopter in service by the SAAF and the Super Puma helicopter manufactured in France. Pinhol claims he facilitated negotiations between the Portuguese Air Force, with the quiet approval of the Portuguese Government, to channel the purchase via that country’s air force. At the time the helicopter was manufactured by Aerospatiale (since absorbed into Eurocopter). Armscor denies that it had any contract or agreement with Pinhol. It further denies Pinhol had a mandate to act as intermediary, or that the transportation of 50 Oryx helicopters in kit form was ever transported through the Portuguese channel. Should the court decide in favour of Pinhol and the amount he is claiming from Armscor, it will, according to military experts, have dire consequences for Armscor. The acquisition agency, which is part of the Department of Defence, is facing similar budget shortfalls as the SA National Defence Force.

Armscor spokesperson Liziwe Nkonyana said the final hearing in the matter took place in September. ‘The court considered the evidence of all witnesses including Armscor’s expert witness as the last witness before the matter was adjourned for preparation of the heads of argument, which are due in 60 days. Judgment is expected thereafter,’ she said. BusinessLIVE notes that Nkonyana said the current matter was preceded by two previous attempts by Pinhol. Litigation was first instituted against Armscor in 1993 in SA and then against the manufacturer in 1996 in France. The arguments were based on the same allegations as the current case. ‘Both these matters were successfully defended in SA and in France. In SA the plaintiffs decided to withdraw the claim and to tender costs after two days of intensive cross-examination during trial. In France, the court dismissed the action and ordered plaintiffs, jointly and severally, to pay damages to the defendant’.