Denel can­cels Gupta deal

Weekend Post (South Africa) - - NEWS -

STATE arms maker Denel has an­nounced it is can­celling its part­ner­ship with the Gup­tas.

It was ex­it­ing Denel Asia‚ its 51% part­ner­ship with Gupta-linked VR Laser Asia, it said at its an­nual re­sults brief­ing yes­ter­day. It cited rep­u­ta­tion dam­age both lo­cally and in­ter­na­tion­ally caused by “neg­a­tive at­ten­tion from the me­dia”.

Denel’s act­ing chief ex­ec­u­tive, Zwe­lakhe Nt­shepe (pic­tured), con­tin­ued to deny the paras­tatal’s part­ner­ship was with the Gup­tas‚ say­ing VR Laser Asia was wholly owned by Salim Essa, a close Gupta as­so­ciate.

“We made a joint ven­ture with a com­pany‚ and the com­pany in my un­der­stand­ing was not owned by the Gupta fam­ily‚” Nt­shepe said.

He de­clined to com­ment on ev­i­dence in the Gupta leaks show­ing the Gupta fam­ily se­cretly con­trolled the joint ven­ture. “We do not have those e-mails so we can­not com­ment on them.”

Leaked e-mails show the Gupta fam­ily would con­trol Denel’s foray into the Asian arms mar­ket through a se­cret sub­sidiary in In­dia part owned by Anil Gupta‚ brother-in-law of Tony‚ Atul and Ajay Gupta.

Denel Asia was chas­ing arms deals worth R100-bil­lion in In­dia‚ the world’s largest arms im­porter‚ and expected to break even in a year.

Denel’s Asian ven­ture with the Gup­tas has dented its im­age in the In­dian arms mar­ket af­ter work­ing for a decade to over­turn a black­list­ing from al­leged kick­backs paid to an off­shore en­tity to se­cure an anti-ma­teriel (mil­i­tary) ri­fle deal in 2005.

Adani‚ the In­dian com­pany that would have held a stake in Denel Asia’s In­dian sub­sidiary‚ said ear­lier this year it had pulled out of the deal be­cause it wasn’t com­fort­able with the part­ners.

Denel’s previous mis­ad­ven­ture in In­dia cost tax­pay­ers R500-mil­lion. – Busi­nessLIVE

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.