New Denel board of directors is first step, says Gordhan

THE appointment of a new board of directors at the ailing state-owned arms manufacturer Denel was the first step in ensuring that good governance was restored and that processes that had led to state capture were reversed, Public Enterprise Minister Pravin Gordhan said.

Gordhan announced the appointment of an entirely new interim board for the arms manufacturer, headed by former Airports Company SA (Acsa) chief executive Monhla Hlahla. Gordhan said Hlahla had spent a large part of her career in the infrastructure sector, starting in 1994 at the Development Bank of Southern Africa.

Other interim board members are: Zoli Kunene, Tshilidzi Marwala, General TT Matanzima, Gloria Serobe, Talib Sadiq, Sue Rabkin, Sibusiso Sibisi, Cheryl Carolus, Nonzukiso Siyotula, Thami Magazi and Martin Mnisi.

Last month, a few days after Gordhan was appointed public enterprise minister, Denel board chairman Daniel Mantsha resigned. Mantsha has been implicated in allegations of state capture.

Gordhan said the changes to the Denel board were in line with President Cyril Ramaphosa’s call to fix issues at stateowned enterprises. Gordhan and his team met the interim board, the five trade unions represented at Denel, as well as about 100 suppliers.

Last year, Denel admitted it was experiencing severe liquidity problems, which had resulted in the delayed payment of workers’ salaries. It was also battling to pay suppliers.

Gordhan said changing the board was the first step to restore good corporate governance at Denel.

During his time as finance minister, Gordhan also locked horns with Denel after the Treasury refused to give it permission to go ahead with its Denel Asia project.

Denel Asia was a joint venture between Denel and VR Laser Asia, owned by Gupta family associate Salim Essa.

Denel submitted a formal application for approval for Denel Asia under the Public Finance Management Act in December 2015.

When it did not get a response within 30 days, it went ahead and registered the joint venture company in Hong Kong in January 2016. This resulted in a stand-off between the Denel board and Gordhan.

Last year, the Organisation for Undoing Tax Abuse laid complaints of corruption against Mantsha for his role in the Denel Asia venture.