Gordhan assures union he will sort out Denel

Newly appointed Public Enterprises Minister Pravin Gordhan has promised trade union Uasa that he will attend to the crisis at state-owned arms manufacturer Denel.

During a meeting with the union on Tuesday, the minister also said he was concerned that a number of state-owned enterprises, including Denel, could soon run out of cash.

Denel confirmed in December 2017 that it was experiencing a severe liquidity crunch, which had resulted in the delayed payment of workers’ salaries. The government had to issue the company with an emergency loan guarantee of R580m to ensure that it paid suppliers and its 4,000 staff.

Uasa and Solidarity, which also has members at Denel, have blamed management and the Denel board for the financial crisis, saying they had been complicit in corrupt dealings that enriched the Gupta family.

“We appealed to the minister for his urgent intervention to put a stop to the plans of Denel [retrenchments] by way of conducting a full forensic audit and an investigation to prevent any further destruction of shareholder value,” said Willie van Eeden, a sector manager responsible for aerospace industries at Uasa.

Gordhan is also said to have explained to the union’s leaders that poor management of state-owned enterprises “took its toll over the last 10 years”, and that it would take a major intervention to get them to function optimally again.

Last week, Denel board chairman Daniel Mantsha resigned from his position. He was appointed in July 2015 and was implicated in allegations of state capture at Denel.

Lobby group the Organisation Undoing Tax Abuse laid corruption charges against him for overseeing the Denel Asia project, which involved Guptaowned companies.