South African Defence Firms Allege Unauthorized Transfer of Military IP to UAE Entities

South African defence company Paramount Group has provided detailed information to the Special Investigating Unit (SIU) amid an ongoing investigation into claims that military intellectual property (IP) developed in South Africa was unlawfully obtained by companies in the United Arab Emirates (UAE).

The probe centers on suspicions that employees from at least two South African defence firms, including Paramount Group and Denel SOC Ltd, passed sensitive military IP to UAE state-owned entities. Paramount’s legal representative, Lynn Lauth, confirmed the company’s full cooperation with the SIU, emphasizing the focus on alleged wrongdoing by UAE government-controlled organizations targeting South African defence IP.

The Organised Crime and Corruption Reporting Project (OCCRP) obtained two key SIU briefings: a 2023 presentation to South Africa’s parliamentary standing committee on public accounts (Scopa) and a 2025 PowerPoint outlining the SIU’s investigative findings. These documents highlight allegations that Denel employees misappropriated research and design data fundamental to arms production.

The SIU declined to comment publicly on the investigation, citing its reporting obligations solely to the president and parliament. A spokesperson noted that evidence suggesting criminal conduct has been forwarded to the National Prosecuting Authority for further action.

Paramount Group has also initiated an internal investigation to ascertain whether any employees provided IP to a UAE company following a joint venture agreement that ultimately collapsed. Founded in South Africa in the early 1990s, Paramount is now headquartered in the UAE but filed for bankruptcy last year after losing an arbitration case in London against Abu Dhabi Autonomous Systems Investments Company (Adasi).

The company’s difficulties began in 2016 when its subsidiary, Riverston Enterprises Limited, entered a joint venture with Adasi. This partnership dissolved after Adasi was acquired by another UAE state-owned firm, Edge Group, according to internal records and court filings reviewed by the OCCRP.

As part of the joint venture arrangement, Adasi provided Paramount with a $150 million loan intended to cover the establishment of the UAE-based joint venture and the transfer of IP related to Paramount’s reconnaissance aircraft. The plan was to convert this aircraft into an armed strike platform named the MWARI.

Both Paramount and Adasi agree that the intellectual property transfer never occurred. Paramount asserts it is no longer legally obligated to transfer the IP, while Adasi claims rights to the IP under the arbitration ruling.

Neither Edge Group nor its representatives responded to requests for comment. However, legal documents filed by Adasi in Paramount’s bankruptcy proceedings reveal that Adasi views the bankruptcy filing as a stalling tactic by Paramount to shield assets, including valuable IP, which Adasi contends was granted to it.

The arbitration penalty against Paramount totaled $230 million, encompassing the $150 million loan for the IP transfer. Paramount’s lawyer, Lynn Lauth, maintains that the MWARI aircraft’s intellectual property remains governed exclusively by South African law and has not been externalized to any UAE entity.

Experts note that military-use intellectual property is often not patented to prevent exposure to competitors or hostile parties. Instead, such IP is treated as a sovereign asset under government oversight. Vanessa du Toit, former head of South Africa’s National Conventional Arms Control Committee, confirmed that military technology and arms exports are tightly controlled to safeguard national security interests.

The unfolding investigation underscores the complexities surrounding defence IP protection in international joint ventures and the challenges posed by cross-border disputes involving state-owned enterprises. The SIU’s referral of evidence to prosecuting authorities signals potential legal consequences for those implicated in the alleged misappropriation of South African military intellectual property.