Every decision was taken in the best interests of the company and not to advance state capture.
This is according to Stephan Burger, former Denel Land Systems (DLS) CEO, who told the state capture commission that decisions he took — including the controversial award of a contract to Gupta-linked company VR Laser — were with the company's interests at heart.
He told the commission on Thursday that he had held various positions in the company from 1981 to 2018.
“In the 13 years as CEO, I inherited a business that was bankrupt. It had about R280m turnover, a huge overdraft and very little order cover. We went through a process of refocusing the company. LMT [Land Mobility Technologies] had a role to play in refocusing the company,” Burger said.
According to Burger, Denel grew to the point that, in 2016 and 2017, the turnover of the business was just under R3bn a year.
“That performance, in my opinion, is unprecedented. It happens through people who are dedicated and who are not afraid to take decisions and think outside the box.”
He defended a decision the company took to give a contract to VR Laser. The commission has heard that VR Laser was awarded the contract, even though LMT, a company which had also submitted a bid and was an entity of Denel, quoted R100m less.
“I passionately felt that the decision to give a contract to VR Laser was the right decision because I felt at the time it was the best company to do the job,” he said. He said Denel had a scoring system in place on how they rated suppliers, and VR Laser was at the top and LMT was at the bottom.
The suppliers, he said, were rated on customer satisfaction, quality and time delivery.
Burger said he “passionately” supported the proposal of getting a single-source contract instead of going out on tender.
“When a decision was taken to go for a single-source agreement, though that was not my idea or proposal, I supported that. When this proposal was made to me, I saw only the benefits ... and I supported it passionately.”
The decisions, he said, were taken with Denel’s best interest at heart.
“If there were people who benefited from irregularities because of my support for those actions, I cannot stand for that. I took a business decision. When everybody comes and says those decisions were made because of state capture or to enhance state capture, I really get upset about it.
“We tried to make good business decisions. If those decisions were because of state capture, then I don’t think it is fair.”
The transaction between Denel and VR Laser, Burger said, was genuine and lawful. This is despite evidence before the commission that VR Laser was made to alter its price from R260m to R190m to get the contract.
“I gave an angry call to VR Laser. I thought the price was too high,” he said.
Commission evidence leader Paul Kennedy found the decision by Burger to make a call to VR Laser and the company subsequently lowering its price to be “a disturbing feature”.
Burger said he was under the impression that VR Laser was aware that it would not get the business if its price was too high.
