Marion Edmunds
Former Denel chief executive Johan Alberts walked away from the arms parastatal with a whopping R18-million in pension and restraint-of-trade payments, according to a senior government source.
Minister of Public Enterprises Stella Sicgau is sitting on an explosive forensic audit that exposes how Alberts and other top managers at Denel paid themselves huge golden handshakes when they quit the company.
Sicgau ordered the audit last year after details of Alberts’s multi-million-rand retirement package were leaked to the press. The audit was concluded in October, but she has yet to respond to the issues it raises.
According to a senior government source, the audit questioned a series of generous restraint-of-trade payouts to top Denel management.
Alberts negotiated a restraint-of-trade deal for himself worth more than R4-million – in addition to his pension windfall of between R12-million and R14-million.
The audit also questions a lucrative incentive scheme for Denel managers, and its failure to refer important decisions to its principal shareholder, Sicgau and the government.
The audit cost Sicgau more than R2-million and was conducted by Johannesburg-based forensic experts Gobodo, Manase and Associates.
Sicgau did not respond to questions about the payments or the audit this week. Although questions were faxed to her office 24 hours before the Mail & Guardian’s deadline, there was no response from either her secretary or her media representative.
Asked on Thursday morning where she was, Sigcau’s secretary said she was attending a parliamentary session.
But when the secretary was told Parliament was not in session, she said Sigcau had not yet come into her office.
Alberts refused to comment on his retirement payout, saying: “I can tell you point-blank, I did not get R18-million.”
He refused to say whether he had received less or more. “This is my private business. Denel’s pension fund is not owned by the state. There was nothing improper about my retirement.”
The former arms chief threatened to sue the M&G if it published any details relating to his pension payout.
The M&G has learnt that Alberts had a special agreement with former defence minister Magnus Malan, to the effect that his retirement be paid out as if he were 65 years old, regardless of whether he retired earlier. Alberts also refused to comment on this .
He also brushed off questions about allegations that he intervened to promote Sicgau’s daughter, Portia Shabalala, at a Denel subsidiary, Swartklip Products.
Shabalala was transferred from Swartklip in the Cape to Denel’s head office in Pretoria late last year, where she heads an office dealing with corporate and community investment, her field of expertise.
She refused to respond this week to queries about her status in Denel and her relationship with Sicgau.
Denel this week responded to questions on Alberts’s package by shifting responsibility to the board: “Mr Alberts left the company on early retirement. His departure did not constitute the present right-sizing exercise. Mr Alberts’s package was handled at board and shareholder level.”
Denel meanwhile is in serious financial trouble and is pushing through stiff cutbacks to make ends meet. Its net profits plunged from R379-million in 1996 to R82-million last year.
Its managing director, Seshi Chonco, is moving swiftly to streamline the company, root out corruption and reprioritise operations, on the advice of international consultants.
Chonco is fighting against all odds. The cancellation of lucrative arms deals and the slashing of the national defence budget has put even more pressure on the parastatal to downsize.
As a result, Denel is retrenching staff – a process which has enraged unions and lowered staff morale.
Denel’s communications director, Thembi Tulwane, said heavy cuts are on the cards this year: “It is envisaged that 7% of the total Denel staff complement of 13 500 will be affected. That 7% constitutes 1 034 employees from our 18 divisions.
“This process is all-inclusive. The composition of affected employees encompasses directors, senior managers, middle management and white- and blue-collar workers.”
Chonco announced 85 retrenchments last month, including four directors at head office, at a cost of about R9-million.
The unions are calling for a crisis meeting to discuss what they perceive to be unilateral action on the part of Denel management.
A dispute has been declared at Denel subsidiary Naschem, where 144 workers have been retrenched, and at Swartklip Products.
Meanwhile, the privatisation of Denel, Sicgau’s responsibility, appears to be a long way from fruition.
“The restructuring of Denel is the prerogative of the state. We are awaiting instructions from the government.
“Denel continues to do studies and data gathering on its business and is ready to make this available to the government,” Tulwane said.