Treasury is sticking to its guns on Denel

THE NATIONAL Treasury on Friday reiterated its opposition to the application by stateowned arms manufacturer Denel to establish a joint-venture with Gupta-linked VR Laser SA.

This comes after Denel said it was forging ahead to re-establish itself in the east Asian market via its joint-venture with VR Laser, despite a court bid to halt the undertaking.

Denel wants to create Denel Asia in partnership with the Asian-based business of VR Laser as a vehicle to penetrate the Asia-Pacific markets.

VR Laser Asia is owned by the Guptas.

It was revealed in court papers that VR Laser SA might be a technically insolvent company and as such did not appear to be in a position to raise the funds that would enable VR Laser Asia to establish the joint venture with Denel.

In a statement, the Treasury said it had noted Denel’s statements in relation to the Denel Asia transaction.

“National Treasury would like to place on record that Minister Malusi Gigaba held a meeting with Denel chairman Daniel Mantsha to discuss the Denel Asia joint venture.

“At the meeting, Minister Gigaba reiterated his opposition to the joint venture with VR Laser Asia, given the fragile financial situation that Denel is in,” the Treasury said.

“The minister further invited Denel to withdraw its litigation against the National Treasury.

“The position of the minister of finance has not changed in this regard. He remains opposed to the transaction for reasons stated elaborately in the Treasury affidavit to the high court,” the statement pointed out.