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Trial Report: Thirty-One

Reports pertaining to 10 October - 13 October 2000.

This report reflects the testimony of American attorney, David Webster. The court moved to Jacksonville Florida during October 2000 to hear his evidence and that of Jane Webster.

Tuesday October 10, 2000

In accordance with the State's successful application to hear the evidence of Florida attorney David A. Webster and his wife, Jane, on commission, following Webster's refusal to testify against Basson in South Africa, the court convened in the US Middle District Court, Jacksonville, with Judge Willie Hartzenberg presiding.

Basson was not present during the American hearings, his defence counsel having indicated to the court in Pretoria that because of his persona non grata status in the US, and threats to his life, the hearings would have to take place in his absence. All three members of his defence team - advocates Jaap Cilliers and Tokkie van Zyl and attorney Adolf Malan, were present, along with senior prosecutor Anton Ackerman and his assistant, Werner Bouwer. Arrangements for the hearings were handled by Ron Henry of the US Attorney's office and the hearings were granted by US District Court Judge Ralph W Nimmons, but took place in terms of the rules and procedures of the South African legal system.

Justice Hartzenberg ruled that the hearings would be closed to the media, with the exception of two South African journalists who were warned not to link Webster to any of the charges other than those of fraud.

Webster was asked to identify the beneficial owner/s of the WPW group of companies, he told the court that he was clear that he had always dealt with Basson in regard to WPW business. From Basson and Webster's initial introduction throughout their relationship, Webster said, his understanding with Basson had been that he would be the only person with whom Webster would deal, and Webster would receive all his instructions from Basson, even though, when they first met, Basson told Webster he was in the Cayman Islands on behalf of a group of European businessmen, who wanted to do business in South Africa despite prevailing international economic sanctions. This was the basis on which their relationship was launched, Webster said, but with the clear understanding that Webster would treat Basson as the beneficial owner and, in fact, would acknowledge him as such for purposes of all future dealings with him.

Webster testified about his 14-year association with Basson saying they met in July 1986 in the Cayman Islands, at the request of Wilfred Mole, one of Webster's existing clients, who told the attorney he wanted to refer a client of his to Webster for assistance in conducting international business transactions. The decision was taken at this first meeting, says Webster, that corporations would be set up in the Caymans to serve as the nexus of future international deals. Mole introduced Basson as a "substantial" cardiologist and businessman, with former military links. Webster says he was told Basson had retired as a military doctor and was now teaching medicine at a South African university and practicing cardiology. Basson told Webster he was the attending physician to the South Africa president at the time - PW Botha - and wanted to create opportunities for business dealings between South Africa and the rest of the world.

Webster says the first indication he had that Basson was still actively involved with the SA Defence Force, was in 1993 or 1994, when Basson "mentioned in passing" that he had just become a brigadier. Webster did not pursue or question Basson about this promotion, because he "sort of assumed" that Basson was a member of the active military reserve rather than a serving military officer.

As time passed, Webster and Basson became friends, and on several occasions, Basson requested that Webster - or his wife, Jane, or Jane and her mother, Caroline Roberts - travel to South Africa. Twice Webster joined "the group" at gatherings in the Kruger National Park.

Webster said that on October 6, 1986, he set up three corporations in the Cayman Islands for Basson - WPW Investments, PCM International and Medchem. Webster has "no present memory" - a phrase used a great deal during his testimony - of how the names came to be chosen, or who suggested them, but typically, he says, the names would be supplied by the client.

WPW was formed and served as the holding company for the group. It was never intended to be an operating company. At a later stage, substantial amounts of money were channeled through PCM and Medchem, before these corporations became dormant until "given" to Tjaart Viljoen (PCM) and Philip Mijburgh (Medchem) in 1991. Webster said that Basson was "constantly reshuffling" the structure of the group's world-wide holdings, but he could never make sense of this. "It seemed like he was trying to get some business alignment to occur where there would be effective controls, proper reporting."

Webster testified about the contents of his files which, amongst other things, contained documents relating to Contresida, another Cayman-based corporation. Webster says when he asked Basson about the meaning of the name at the time it was set up, he was told that Contresida means "anti-AIDS" in an African language. Immediately after being set up, Contresida saw a flurry of activity. Webster was informed that Basson and Mijburgh were "creating a situation" which would allow the World Health Organisation to make a $100-m loan to the South African government of the day for AIDS treatment and research. The loan would be guaranteed by the South African government and the funds were to be paid out over a period of time, and used to make loans directly to companies involved in AIDS treatment and research. But, says Webster, the loan was never made by WHO, and Contresida remained dormant for several years, until it was transferred to Wynand Swanepoel.

All information Webster ever had about the AIDS project was given to him by Basson, whom Webster understood to be the South African representative of the WHO's AIDS treatment and research programme in South Africa. Webster recalls "seeing pieces of paper" to this effect.

Regarding ultimate ownership of Delta G Scientific by Medchem Consolidated Investments, Webster said he had been taken on a tour through Delta G in 1988/89 but had no further involvement with the company. It was made clear to him, however, that this was a state-of-the-art pilot plant - a facility between the laboratory research and full production stage in the chemical industry.

Wednesday October 11, 2000

The second day of David Webster's testimony in Jacksonville began with a rundown of the WPW Group's earliest assets and investments: the King Air, bought for $950 000, the $3,2-m Jetstar, Merton House, which cost an estimated R12-m, Fairclough Cottage at Warfield, England, the Brussels apartments, the Orlando condominium. Webster also testified about WPWs relationship with Roger Buffham and his Company Contemporary Systems Design - a relationship which over a period of years resulted in a £500 000 loss for Amfra when the company withdrew from its involvement in CSD in 1991.

On May 10, 1988, Webster wrote to Basson that he had found a King Air for sale at $850 000. By May 24, the contract was signed by Webster, who issued instructions, at Basson's request, that the aircraft be fitted with an advanced global navigation system. Some reconfiguration of the aircraft body was also required, but Webster has forgotten the details. Modifications added $102 000 to the purchase price. Webster testified that he had "no idea" where the funds would come from but, like all other deals he brokered on behalf of WPW, expected a wire transfer to be made. On June 3, 1988, acting on Basson's instructions, Bank Indosuez in Geneva transferred $950 000 to the Florida National Bank. On June 7, Basson wrote to Webster that the funds "will arrive soon" and mentioned that "I have just received the new proposals from Philip. I will work through them tonight and fax the documents and commentary to you tomorrow". This was a reference to the proposed acquisition of Delta G Scientific, says Webster.

Webster said that from the outset he was involved in the possible acquisition of an interest or total control in Delta G Scientific. To this end, he had dealings with "several" individuals he was told were directors of the company, but whose names he "has no present memory of", on his visits to South Africa.

Basson visited Webster in Orlando three or four times, accompanied on one trip by Annette Versluis, to whom he was not yet married. Other visitors to Orlando were Sam Bosch, Philip Mijburgh, Basson's mother Bronwyn and his stepfather, who were guests of Webster's mother-in-law, Caroline Roberts.

On June 24, 1993, Basson wrote to Webster: "I have decided that we should sell the King Air". Webster was to actively market the aircraft, while Basson himself was "working on refinancing options" regarding the Jetstar. Asked at this point by prosecutor Anton Ackerman who was the goose that laid the golden eggs, Webster replied: "Dr Basson was the man I dealt with at all times". But, he made it clear, he had no idea of the origin of the funds, and no reason to ask questions in this regard, as long as the funds flowed through legitimate banks. When funds were needed, Webster contacted Basson, but never once asked where Basson got the money.

The amounts, he says, were not "particularly high", seen against an American cardiologist's income. They were not at all out of line with what Webster would expect a successful medical specialist to make, especially since, at the time, South Africa was on the leading edge of cardiology internationally. Judge Willie Hartzenberg interjected saying that at the end of the 1980s, $3,2-m was a lot of money in South African terms, and it would have been highly unusual for a cardiologist to be in a position to buy a King Air, a Jetstar, a condominium in Orlando, and so on. In American terms, said Webster, this was not at all unusual - many doctors own two aircraft. Along with a Mercedes-Benz, these are status symbols of choice. The judge noted that 'there is a marked difference between a Jetstar and a Mercedes-Benz in South Africa'.

Asked by Ackerman how he saw the WPW Group, Webster said it had evolved to the point where operational people were responsible for certain spheres of influence. The USA was Webster's responsibility, Europe was in the hands of Bernard Zimmer or David Chu and Southern Africa was run by Swanepoel, Mijburgh, Viljoen and Bosch, with Chris Marlow in charge of legal structuring. Webster testified that he played no decision-making role at all in these arrangements, and was merely informed of events after the fact.

Ackerman suddenly asked Webster what he had known about Roodeplaat. Webster said he knew about the programme to breed special security dogs and had, in fact, been taken to Roodeplaat by Basson to inspect the breeding facilities. At this point, according to the court transcript, there was an off-the-record discussion in court. When the hearing went back on the record, Webster said during the visit to Roodeplaat, Basson had shown him the "wolf-dogs" and told him this was part of the group's activities in South Africa.

Thursday, October 12

Webster confirmed during his testimony that Basson had authorised the use of funds from the WPW account to pay for the refurbishment of the Jetstar, and that he had also authorised the use of funds from the Medchem account. A letter from Jane Webster to her husband also recorded Basson requesting WPW assets be moved to the company Luft in South Africa. The assets were not moved but sold at a later stage. Webster also testified about the sale of the Jetstar.

Webster told the court that on January 27, 1993, he wrote to Zimmer that funds were urgently needed by WPW North America, and that the situation was critical, as all available resources had been exhausted. Webster contacted Zimmer in this regard because he had been informed that Zimmer was now acting as banker for the entire WPW Group. In the letter, he says: "As you know, we're trying to minimise contact with our principals under the current situation".

The principal, he testified, was Basson, but he had 'no present memory' of what lay behind the need to minimise contact with him. Basson had said there was "some kind of investigation" going on in South Africa and he wanted to maintain a low profile for a time. Webster's letter to Zimmer ends: "If you are in contact with them in a secure situation, please let them know of the request".

In a handwritten letter on March 18, 1993, Basson wrote to Webster: "I'm still surviving. I hope to sort out most of the hassles before the end of March. I need some help from you. The partial sale of the Jetstar and transfer to Europe is now potentially ongoing again. What I need is a bill of sale showing the transfer of the Jetstar to Blackdale, Dublin, Ireland. This must be dated 3 August 92. It will not be filed. I just need it to lay a specific trail. I will explain later." Webster complied with Basson's instructions, but cannot recall specifically what, if any, explanation Basson eventually offered him. However, he sent the bill of sale to Zimmer as requested on the same day.

Webster's evidence showed that by the end of June 1993 the WPW group of companies were in serious financial difficulty. They however continued operating and in December 1995 Webster arranged for the sale of the Jetstar to an American company for some $2 million. After the sale of the aircraft, WPW made an investment in the company Tubmaster, a company in which the Webster's had a family interest. WPW acquired controlling shares in the company and made a capital loan of $60 000 to Tubmaster. According to Webster, WPW still has a controlling share in the company.

Since 1997, Webster has had no contact with Basson regarding Tub-Master at all, and no one else has contacted him in regard to this investment. Webster finds himself in a difficult situation - Tub-Master has a majority owner, but he is not sure who this is. He has not been allowed to contact Basson, as per instructions of Basson's attorney, Adolf Malan and state prosecutor, Anton Ackerman, about this situation, and has no idea who else to approach. If no one comes forward to claim the 63% shareholding, it would not automatically revert to Webster and/or his wife. He hopes that at some point, the Basson trial court will direct him what to do, either by affirming who the owner of Tub-Master is, or ordering that the majority shareholding must be forfeited to the State.

Regarding Fairclough Cottage at Warfield, England, Webster says the property was introduced to Basson as being available at a time when he had an interest in acquiring a "facility" for the WPW Group, since people were constantly flying into Europe and England. Basson himself was a frequent flyer, and it made long-term economic sense to purchase an operational base and residence rather than staying in hotels. The facility would be at the disposal of Basson, Webster, Mijburgh, Marlow and anyone else visiting England on behalf of WPW. Jane Webster was tasked with the interior decoration of the cottage, paid for by WPW Investments Inc.

In 1998 Fairclough Cottage was sold for £310 000, and the funds remain to this day in Webster's trust account. Webster confirmed that state prosecutor, Anton Ackerman was "furious" when he learned of the sale, and that apart from Ackerman, the only people who have approached him in regard to the trust funds in the interim are representatives of the South African Asset Forfeiture Unit. Ackerman told the Judge that in due course he will take possession of the trust funds.

With regard to Merton House, the luxury Pretoria property, Webster explained that WPW owned the house and directed one of its officers and directors to act on the corporation's behalf - but to the extent that Webster was involved, he received instructions from Basson. He gave Basson no instructions on what to do, buy or use in the house. As with all WPW activities in South Africa, Webster's involvement was confined to the legalities of WPW ownership, and he had nothing to do with the specific use, operation or renovation of Merton House. Indeed, Merton House was already owned by the Wisdom Group when Webster became involved in Basson's affairs. On September 7, 1989, Webster was instructed that WPW was to buy the property in a R850 000 commercial rand deal "as soon as possible".

Webster also testified about the purchase of a condominium in Orlando by WPW and its subsequent sale, as well as the WPW investment in a golf club development in Belgium, and other deals involving property in Belgium and the UK.

Friday, October 13

David Webster's understanding of Medchem Forschungs was that Dr David Chu was to set up this company in Switzerland as the research facility of the WPW Group, and to perform contract research for local pharmaceutical companies. In a letter to Webster, Basson deals with formation of Medchem Contract Research, saying Chu is amenable to a system which would see profit-taking diverted outside Switzerland.

However, the new company would have to have a contract with "RNL" (Roodeplaat Research Laboratories) because outside clients would also want to visit RRL. Webster was to transfer 300 000 Swiss francs from Merrill Lynch to Banque Nationale de Paris in Basel, of which 250 000 francs would be used to purchase share capital and as set-up costs. Operating capital would follow. The money was to be regarded as a loan to Chu from Medchem Contract Research for two years at 7% interest.

On November 10, 1989, Webster wrote to Dr Mathys - a Swiss attorney, as he recalls - that Medchem Contract Research was to be owned 50/50 by WPW Investments Inc and Dr Chu. Webster would serve as chairman, with Dr Rittman and Dr Meitz as directors and Basson an unregistered director. Medchem Contract Research was duly incorporated in 1989.

On June 5, 1991, Webster wrote to Chu confirming that WPW would lend Medchem Contract Research the sum of 500 000 Swiss francs for a period of 18 months. Although Webster had been led to believe that Medchem Forschungs was engaged in pharmaceutical research, on his only visit to the facility, it seemed to be "computer-oriented...with very little visible research capability". His understanding was that profits would be generated by Medchem Basel obtaining research contracts, and that the actual laboratory work would be carried out in South Africa, at Roodeplaat. Basel would then analyse the results on computer and supply reports to the outside clients.

Regarding a March 3, 1988 letter from Mijburgh about PCM investing in Delta G Scientific, Webster said almost immediately after launching his association with WPW Investments Inc, he was asked to travel to South Africa to assist in a proposed transaction to acquire an interest in a chemical pilot plant. During his visit, he met many people, including Mijburgh, and "walked through" the plant. He was acting on Basson's instructions in this matter.

His understanding was that a management buyout of Delta G Scientific was to take place, which would give PCM a 51% share and the remaining 49% to Delta G employees. PCM would pay R50-m for the controlling interest. This deal never took place, Medchem Consolidated Investments in the end purchased the controlling shares in the company.

A letter from Webster to Basson dated October 4, 1991, contains the first recorded mention of a family trust to be set up. The letter also refers to Basson and Mijburgh being expected in Orlando "soon". According to Webster, this could have been for one of the two hunting trips Webster and Basson made to British Columbia, he says. The expeditions have to be arranged six to 12 months in advance. The estimated cost of the trip, per person, was $3 000. Webster paid his own expenses, but has no idea who bore the costs for Basson and Mijburgh.

Webster's testimony continued on Monday 16 October and will be reflected in the next weekly report.

 

This report has been prepared by Chandré Gould and Marlene Burger. Chandré Gould is an associate researcher at the Centre for Conflict Resolution in Cape Town in the Chemical and Biological Warfare Research Project. Marlene Burger is monitoring the trial of Wouter Basson on behalf of this project. This report has been possible by a grant from the Ploughshears Fund.

 
Centre for Conflict Resolution, UCT, Private Bag, Rondebosch, 7701, South Africa
Tel: (27) 21-4222512 Fax: (27) 21-4222622 Email: [email protected]

 
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