OUTA welcomes Denel board shakeup

Public enterprises minister Pravin Gordhan’s replacement of the board at state-owned arms manufacturer Denel has been welcomed by the Organisation Undoing Tax Abuse (OUTA).

Gordhan announced the changes‚ still to be approved by cabinet‚ at the cash-strapped state-owned enterprise on Monday.

“At last decisive action is taking place‚ after the country begged the previous Minister‚ Lynn Brown‚ to appoint competent‚ dedicated and incorruptible directors at the SOEs‚” said Rudie Heyneke‚ OUTA portfolio manager for transport.

“The new Denel board follows the appointment of a new Eskom board in January 2018 and shows that the executive is busy with a clean-up operation at SOEs.”

OUTA said that Denel may require some “major surgery” after the effects of the Guptas were exposed and analysed.

Under Brown and the outgoing board‚ Denel’s debt was R3.265-billion by the end of the 2016/17 financial year and‚ in December‚ it needed an emergency government loan guarantee of R580-million to pay its 4‚000 employees and suppliers.

OUTA called on the new Denel board to investigate the activities of the old guard at Denel‚ including: - Its former chairperson who was central to allegations of state capture there. - An ousted board member who received financial aid for the MKMVA from the Guptas and a stake in the Guptas’ Shiva Uranium mine in 2010. - The Denel order book‚ particularly cases where contracts cannot proceed because of a lack of financial guarantees from Denel.

“It is sad that people entrusted to safeguard state assets actively worked to destroy them. We can only hope that their departure does not equate to evading prosecution‚” said Heyneke.

DA MP Natasha Mazzone said the previous board and management still needed to account before the Commission of Inquiry into state capture to be headed by Justice Raymond Zondo.

“South Africans need a full account of the circumstances that saw the Gupta brothers gain undue influence on some of the company’s high level business decisions‚” she said.

“Denel had fallen prey to gross mismanagement and a carefully orchestrated plan of ‘state capture’ that saw the state armaments company fail to pay its employees and suppliers‚ forcing government to shore it up with a R580-million guarantee.”