The reorganisation of the state-owned Denel arms group has been delayed by an anti-corruption drive led by chief executive Victor Moche, defence industry sources say.
The group, with effect from April 1, reorganised into two broad divisions, called Denel Land Systems and Denel Aerospace.
But while the aerospace division’s future structure was mostly complete, the same could not be said of the land systems side where several senior officials have been suspended, including, at the end of March, Louis Dirker — the man selected to head that branch.
Also suspended are the heads of ammunition maker PMP and artillery manufacturer LIW, according to two independent sources in the defence industry who spoke on condition of not being named.
Denel spokesperson Sam Basche said the suspensions formed part of internal disciplinary proceedings. It was Denel policy not to comment on these.
He did add, however, that under Moche the company has been focussing on eradicating corruption, avoiding duplication and finding efficiencies.
Basche declined to confirm the link between the anti-corruption drive and the delay.
The final structure must still be announced but will likely include several mergers, including LIW with troubled rifle manufacturer Vektor.
The company is widely expected to post a R800-million loss for its last financial year that ended in March.
In October last year, the company announced that the previous year’s net loss situation was improved from R363-million to R72,6-million.
An operating profit of R203,2-million was compared favourably with the previous year’s loss of R258,8-million.
Factors that impacted negatively on Denel’s results were the strengthening of the rand during the last six months of the financial year and additional costs to deal with non-core and loss-making entities.
While Land Systems was a shambles, according to one of the sources, Aerospace was already up and running.
Denel’s group executive director for aerospace, Knox Msebenzi, now has two subdivisions answering to him.
Aerospace Systems, headed by Willie van Biljon, has taken charge of Denel’s stable of missiles, unmanned aerial vehicles (UAVs), the Rooivalk combat support helicopter and the ground-based air defence system project.
These were previously associated with Denel Aviation, Kentron and the now-defunct Denel Programme’s Group that involved retired major general Roland de Vries.
Denel Optronics, managed by Norman Clark, has taken responsibility for electronic and optronics systems such as laser rangefinders, periscopes and airborne cameras previously made by Eloptro and Kentron’s Cumulus business.
Cumulus, in particular, has been accused of establishing for itself a brand that diminished Denel’s — another major driver of the restructuring.
Msebenzi’s division also includes a reconstituted Denel Aviation, now headed up by Trevor van Zyl.
But Moche’s clean sweep has reached even here, with two officials known to have been suspended for apparently personally benefiting from a deal to outsource security.
Answering separately to Moche are also a human resources, finance, marketing, communications and information technology department. – Sapa