Denel’s turn for a grilling over Gupta-linked deal

Gordhan fires first salvo as portfolio committee quizzes SOE

ARMS manufacturer Denel has become the latest state-owned entity (SOE) to face the wrath of Parliament over a Gupta-linked deal.

It was grilled in Parliament yesterday, a day after Eskom came under fire for reappointing its former chief executive, Brian Molefe.

Former finance minister Pravin Gordhan fired the first salvo against Denel on its planned deal with the Guptalinked company, VR Laser.

Gordhan blocked the deal last year. His successor, Malusi Gigaba, has also not endorsed it. Former Treasury director-general Lungisa Fuzile has said in court papers that VR Laser was insolvent.

In a meeting of the portfolio committee on public enterprises, Gordhan questioned the deal and said it appeared there was a pattern of state capture in how the deal with VR Laser was structured.

Gordhan told Denel the pattern was the same as in other entities where executives were removed and the board appointed new executives who were willing to comply with instructions.

Another ANC MP, Dr Zukile Luyenge, said Denel must come clean on its association with the Guptas.

“Whatever Denel has said will be overshadowed by the name Gupta because it cuts across SOEs,” he said.

Luyenge said Denel must prove that all proper processes were followed before getting into bed with VR Laser.

The DA’s Natasha Mazzone and IFP’s Narend Singh also demanded that the Treasury be present to defend itself against Denel.

Without the Treasury present, Denel would be able to say whatever it wanted against them and they would not be able to respond.

After deliberations the committee agreed the Treasury and Denel would meet the committee next week.

Denel chairman Daniel Mantsha denied it had been captured by the Guptas. He said all their business and transactions were above board.

He added that Minister of Public Enterprises Lynne Brown and Gigaba would meet soon to resolve the matter.

But Mantsha refused to be drawn on whether Gigaba had instructed him at a meeting in Durban two weeks ago to withdraw the court application against the Treasury and scrap the VR Laser deal.

He said a solution would be found to resolve the matter.

“We as the Denel board are deeply concerned about the allegations of state capture,” Mantsha added.

He said because Denel was in a relationship with VR Laser, people assumed it had been captured.

“There is fiction and fact. Perception is based on fiction. Because of this relationship with VR Laser people are saying your business relationship is wrong,” added Mantsha.

He said they would welcome any investigation into Denel.

Mantsha added that all public perceptions that Denel had been captured were just fake news.

Denel chief financial officer Odwa Mhlwana denied that their VR Laser contract was worth R10 billion.

He said the deal with VR Laser was worth R400 million out of a total of several other contracts with other players worth R10bn.