Gordhan appoints new board for cash-strapped Denel

The appointment of a new board of directors at the ailing stateowned 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 on Monday.

Gordhan announced the appointment of an entirely new interim board for the arms manufacturer, headed by former Airports Company SA (Acsa) CEO 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.

In March, 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.

In 2017, 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 government was taking to restore good corporate governance at Denel.

“Their role is to ensure that, as the president indicated, good governance is restored, and second that the extent to which Denel was a victim of and participated in the processes of state capture, that those processes be reversed,” he said.

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.

Denel eventually lodged an application with the High Court in Pretoria in a bid to get a thumbs-up for the venture, despite the Treasury refusing to sign off on it. This application was eventually withdrawn.

In 2017, the Organisation for Undoing Tax Abuse laid complaints of corruption against Mantsha for his role in the Denel Asia venture.