The Organisation Undoing Tax Abuse (OUTA) has welcomed Minister of Public Enterprises Pravin Gordhan’s replacement of the Denel board and his promise to hold wrongdoers accountable and “follow the money”.
The new board must still be approved by the Cabinet.
Gordhan announced the appointment of a new interim board for Denel on Monday after meeting with the state-owned defence company.
“At last decisive action is taking place, after the country begged the previous Minister, Lynne Brown, to appoint competent, dedicated and incorruptible directors at the state-owned enterprises,” commented Rudie Heyneke, OUTA portfolio manager for transport in a statement.
“The new Denel (interim) 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 would like to see the same decisive action at other SOEs like South African Airways, Transnet and the Passenger Rail Agency of SA (Prasa).
“Instead of being drivers of the economy and helping creating employment, under the shadow of state capture and the Guptas these entities were a drain on our economy and created a crisis that will take many years to eradicate,” said Heyneke.
OUTA wants the boards which presided over failed SOEs replaced with trustworthy boards, “with competent and technically sound individuals”.
According to OUTA, 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.
“In September, five of the ten outgoing board members resigned. On March 2, that board’s chair, Daniel Mantsha, resigned days before he was due to meet Gordhan,” said Heyneke.
“If he thought this will bring him respite, we have some bad news: he will not escape justice.”
He said OUTA provided former Minister of Public Enterprises Lynne Brown with evidence of Mantsha’s “misdeeds”, but nothing came of it. OUTA also laid a complaint at the Law Society of the Northern Provinces against Mantsha for unethical and unprofessional behaviour. According to Heyneke this is being investigated.
OUTA also laid charges of corruption against Mantsha on August 30 2017.
OUTA called on the new Denel board to investigate the activities of “the old guard” at Denel, including Mantsha; ousted board member Nkopane “Sparks” Motseki; Stephan Burger, the former CEO of Denel Land Systems; and current CEO Zwelakhe Ntshepe.
Other matters OUTA would like to see addressed at Denel include looking into the suspension and ultimately firing of former Denel CEO Riaz Saloojee and the suspension of former CFO Elizabeth Africa and former company secretary Fikile Mhlonto “just two months after the outgoing board was appointed in July 2015 by Brown”.
OUTA would also like the new board to look into the reasons for the withdrawal of the Dentons forensic investigation report into the conduct of the suspended executives and make the findings public.
“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.
“Denel had a reputation as a leader in the defence industry, but it lost its lustre when individuals in key positions were ‘captured’ and chose to serve their corruptors rather than our country.” — Fin24