Denel to Scopa: We are using all means to recoup assets

STATE arms manufacturer Denel has instituted several legal challenges against former clients and employees to recover funds from deals gone sour and is pursuing criminal investigations for the theft of intellectual property (IP) taken at the height of state capture of the parastatal.

Acting chief executive William Hlakoane and board chairperson Gloria Serobe were at pains to emphasise before Parliament’s standing committee on public accounts (Scopa), chaired by Mkhuleko Hlengwa, that all means to recoup assets were being pursued.

However, they said Denel needed “urgent recapitalisation” from the government to continue operations while it implemented a five-year turnaround plan to raise at least R1.5 billion to boost liquidity.

Hlakoane said among legal initiatives, some being pursued by the Special Investigating Unit (SIU) along with the Hawks, was a letter of demand for $720 000 (R10.8 million) paid to technical adviser Philippe Solomon as commission; a court application to challenge the validity of R356m worth of contracts for the now-cancelled Laser Group deal; and an ENNE 7 R69m Fundudzi Forensic Services Disciplinary action report, which recommended action against current employees as well as steps against Khampha Attorneys Incorporated for a R10m investigation for money paid and no services rendered.

There is also a R6m claim against Telspace Systems following SIU concluding its report.

The parastatal currently derives about 60 percent of its income from maintenance work for the SA National Defence Force.