By Patrick Bond.
In spite of cases against genocide of Palestinians filed by Cyril Ramaphosa’s government at the International Court of Justice (ICJ), concerns have arisen that a recent 50% upsurge of artillery ammunition being produced by local parastatal arms firm Denel in a joint venture with German arms manufacturer Rheinmetall finds its way to Israel. If so, ineffective arms control regulation and major infusions of state subsidies allow this travesty, according to DefenceWeb in May 2024: “Denel benefitted to the tune of R9 billion from National Treasury over the past five years at the same time as it recorded personnel losses of just on 60%.”
Denel is not the only South African firm with long-standing ties to the Israeli military industrial complex and its supplier networks; another is the Paramount Group founded in Johannesburg by Ivor Ichikowitz in 1994. But for the latter, both in Pretoria last month and in the U.S. tax-haven state of Delaware’s bankruptcy courts in August, Middle East relationships became financially painful when Ichikowitz declared that several divisions of Paramount were unable to repay debts.
Court papers reveal that among creditors of Africa’s largest privately-held arms dealership are the Israeli firms Cognyte and Elbit Systems. The latter also provides crucial communications for Paramount military vehicles sold to the Ecuadorean army – in spite of its serious human rights abuses – in recent years.
After a string of liquidations, Ichikowitz’s most recent bankruptcy protection request was for Paramount Industrial Holdings, whose Midrand factory was subject to an anti-genocide protest in November 2023 (which Paramount incorrectly described as “blatantly and disturbingly anti-Semitic”).
Another subsidiary, Paramount South Africa, is also implicated, having been set up in 2018 with long-standing Ichikowitz ally Matthews Phosa. As founding chairman, the former African National Congress treasurer had announced, “Paramount South Africa will be embarking on an investment and acquisitions drive, and technology transfer, that will recharge South Africa’s defence industry.”
In reality, while allegedly established to support black economic empowerment, the Ichikowitz subsidiary went quiet and was not even “disclosed on the organisation chart” provided by former Paramount CEO Stephen Griessel in the Delaware bankruptcy court. Yet it stands accused by United Arab Emirates (UAE) officials of suddenly asset-stripping Paramount’s Intellectual Property, which is owed to Abu Dhabi Autonomous Systems Investments (ADASI).
Deals and debts gone sour
Complex bankruptcy papers continue to be filed, following a ruling in favour of ADASI against Ichikowitz at the end of a 2022-24 London arbitration process into which Phosa was dragged as a witness. In a September affidavit, Griessel explained, “Paramount South Africa is a black-empowerment company in South Africa and the reason that’s important is that for the first time in many years, there’s an opportunity for Paramount to build vehicles for South African Defense Force, as well as South African Police Service… Without the black-empowerment credentials, we cannot – we don’t even qualify to bid.”
But a month later, ADASI’s lawyers complained, Griessel “resigned from all his roles within the Paramount Group, effective as of October 18, 2024. Mr. Griessel’s sudden and unexplained departure left the positions of CEO of a global group of companies and sole director of the single U.S.-based Debtor vacant with only nine days’ notice… Now that Mr. Griessel has resigned, he has apparently avoided having to testify further or address additional questions from the United States Trustee or parties in interest unless separately subpoenaed to sit for a deposition.”
The court papers not only suggest that Ichikowitz is trying to escape a massive debt – of more than R4 billion – to ADASI, which is the Emiratis’ drone-manufacturing parastatal. Griessel also disclosed both a previously-reported ongoing joint venture with Elbit, the main Israeli military corporation, and that Elbit retains an address at Ichikowitz’s Midrand factory (992 16th Road).
However, for the first time, the bankruptcy proceedings also revealed Paramount’s $725,000 (R13 million) debt to the Israeli head office of Cognyte Technologies, a spyware firm known previously as a component of Verint, a corporation prosecuted for corruption in the U.S. and criticised by Amnesty International for contributing to South Sudanese surveillance abuses. Cognyte is also under investigation by even the Israeli courts for providing technology to the Myanmar junta as it carried out a coup and widespread civilian murders in early 2021.
Ichikowitz’s financial nightmare – apparently compelling him to stiff the Israeli firms – was catalysed five years ago by the establishment of EDGE, the UAE consolidated military parastatal. Following sales of military vehicles in 2019, Ichikowitz boasted, “The UAE is one of the most sophisticated procurement markets of defence equipment in the world. We are very privileged that our newly launched, next generation armoured vehicle has been selected by the UAE’s Armed Forces. We are very proud of our strong partnership and are committed to strengthening this long into the future.”
But in his version of events, Ichikowitz was duped by potential profits he would make operating his international financial headquarters in league with new UAE allies at the time the Abu Dhabi government signed the Abraham Accords. Blessed in Washington by U.S. President Donald Trump, the UAE normalised relations with Israel in September 2020.
Ichikowitz had apparently presumed that EDGE’s co-ownership of Paramount would include a major equity infusion instead of a straightforward loan. Indeed on the strength of the Abraham Accord deal, Ichikowitz also opened a mysterious Tel Aviv office in early 2021, a “technical liaison office,” according to Paramount.
However, after initial hype about working with the UAE, deals soured. Starting in the mid-2010s, Emiratis have been accused of stealing Denel’s Intellectual Property(IP) via the Guptas and a rogue Denel chairperson, Daniel Mantsha, who from 2018 also served as a lawyer to Jacob Zuma. The same accusation emerged from Ichikowitz’s team in the Delaware courts, with Paramount (‘The Company’) CEO Griessel claiming the UAE firm engaged in “a coordinated poaching campaign targeting key staff of the Company in order to secure the Company’s know-how and part of its Defense IP in order to support the development of its own Defense IP and in order to fast track the development of its own products.”
This was accomplished, Griessel claimed, when 27 Paramount employees – “including the Company’s former Chief Test Pilot of the AHRLAC aircraft (an innovative aircraft designed and manufactured by the Company), were poached to take up employment in EDGE” or associated firms. As a result, the “very serious and lasting negative impact on the Company” of losing staff meant that by late 2020, ADASI no longer wanted a Paramount co-ownership deal with Ichikowitz, and instead called in an outstanding loan – originally $149 million in 2019 – in the amount of $230 million (with additional claims of $60 million), pushing several Paramount subsidiaries into bankruptcy once Ichikowitz lost the London arbitration.
What really happened is still unclear because ADASI counterclaims that Ichikowitz is stripping assets out of Paramount to avoid the firm’s collateral being captured in lieu of loan repayments.
A history of corporate-political turmoil
Earlier this year, South Africa’s leading investigative journalists’ non-profit agency, Amabhungane, objected to the secretive nature of another of Ichikowitz’s divisions in liquidation: “By operating in low scrutiny jurisdictions, the Paramount Group might have placed itself outside of the oversight structures in South Africa that restrict military trade. In addition, questions have been raised about the alleged funding of political interests ranging from South Africa’s ruling party to politicians abroad, and whether political connections have enabled the expansion of the company outside South Africa.”
For much of 2023, the Ichikowitz Family Foundation was indeed the single largest funder of Ramaphosa’s ruling party, the African National Congress. In another case, the Malawian government criticised one of Ichikowitz’s most controversial deals after it emerged that prior to that country’s 2014 presidential election he had hired Bell Pottinger – the disgraced Gupta-era London public relations firm that was forced to fold in 2017 – to burnish the reputation of then president Joyce Banda. After she lost, the successor government’s Finance Minister Goodall Gondwe questioned Paramount’s $145 million military support deal with the Malawi Defence Force because it was, he told Amabhungane journalists, “illegal, expensive and unsustainable.”
The Paramount subsidiary that sold boats to Banda, Nautic Africa, went into liquidation in late 2023. Another liquidation – of Paramount Combat Systems in 2018 – revealed what Amabhungane described as Ichikowitz’s ‘hollow man’ style of financial manipulation.
Further leaks to the International Consortium of Investigative Journalists in 2020 disclosed how Barclays Bank cut off dealings with another Paramount subsidiary because in 2017 the bank’s U.S. branches were “concerned” about “Ichikowitz and his companies’ source of wealth and Ichikowitz’s possible involvement in bribery and corruption,” as Barclays argued in its ‘Suspicious Activity Report’ on the South African, filed in 2017 with U.S. Treasury Department’s Financial Crimes Enforcement Network.
UAE and Israel ‘normalisation’
Subsequently, Ichikowitz has been even more vocal about his support for Israel, especially in recent months during what the South African Justice Department terms genocide, and what in July and September the ICJ and United Nations General Assembly ruled were illegal Israeli occupations of Palestine that should result in trade sanctions.
In late 2023, as the genocide of Palestine got underway in the wake of Hamas’ October 7 attack on areas near Gaza, the Ichikowitz Family Foundation was a brazen, public supplier of tefillin (spiritual leather garb) to the Israel Defense Forces. And this year, as South Africa’s anti-genocide ICJ case took on global prominence, Ichikowitz published condemnatory articles in the Chicago Tribune (“the worst decision the country has ever made”) and Fortune.
The Delaware court documents suggest the need for a relook by the Pretoria regulator supposedly monitoring such deals, the South African National Conventional Arms Control Committee (NCACC). Several months ago, the notoriously-lax NCACC lost a human rights case in local courts for approving an illegal Myanmar arms deal. The same committee had offered late-2023 denials that Ichikowitz and other local firms worked with the Israel Defense Forces, in spite of Ichikowitz’s presence in Tel Aviv and his tefillin supply to the genocidaires.
Some in the global Zionist establishment reject international rule of law, and for many years have termed ICJ and International Criminal Court prosecutions “Hague Shmague,” especially when they generate war-crime arrest warrants for Israeli leaders. As these won’t be enforced and the ICJ genocide case will last more years, the period ahead will test South African resolve.
Palestine solidarity movement activists want coal sales halted and reparations paid; full Boycott Divestment Sanctions regulations imposed on trade; prosecution of South Africans who serve in the Israel Defense Forces; and the end to diplomatic relations. Activism has taken the form of protests, e.g. on August 22 at Glencore’s Johannesburg headquarters and Cape Town oil company branch, and again on October 8 when climate activists included a protest at the Ichikowitz Family Foundation’s Sandton office during an anti-fossils march where a leader of SA Jews for Palestine addressed the crowd.
Meanwhile, Ichikowitz will continue his highly-publicised next-generation surveys, which mid-year discovered that “Africa is so awash with corruption, 60% of its young people want to leave” and, last month, revealed “Shocking Findings: 71% Of Africa’s Youth Believe That Climate Change Will Increase Conflicts.”
Of course, the Paramount Group’s own roles in graft controversies that so concerned Barclays in 2017, and military ship and air support sales that protect Big Oil operating offshore Nigeria and Mozambique in subsequent years, need not be revealed to the youth.
Patrick Bond is distinguished professor at the University of Johannesburg.
The views expressed are those of the authors and do not necessarily reflect the official policy or position of the Fullview.