Wednesday, December 12, 2018
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New Denel board “cautiously welcomed”

Reaction to new Denel board“We weren’t expecting a completely new board, but have to admit it’s welcome,” was the reaction of trade union Solidarity to the announcements made by Public Enterprises Minister Pravin Gordhan on Denel on Monday.

Deputy general secretary Deon Reyneke said the Centurion-headquartered trade union was continuing with its legal action against the State-owned defence and technology conglomerate.

He also confirmed to defenceWeb that Solidarity was one of the trade unions with Denel membership Gordhan had met with ahead of announcing a new board on Monday.

“Our meeting with him was open and honest and we discussed the problems we see at Denel as well as getting him up to date on correspondence addressed to both him and his predecessor, Lynne Brown,” Reyneke said.

“We knew changes were coming in the Denel board of directors, but were not expecting a completely new board. It was a surprise and a welcome one,” he said, adding the mix of competencies represented should “be able to do the right thing at Denel”.

Reyneke said the new board did not mean an end to criminal charges. “Solidarity will be going ahead and pressing criminal charges against Denel for ‘reckless financial management’”.

Military analysts Darren Olivier of African Defence Review said the appointment of a new board at Denel was both “necessary and welcome”.

“The old board was tainted and could no longer be trusted. It’s only a first step: there’s a need to put a credible executive team in place and begin undoing the damage as soon as possible. The market is unforgiving and Denel does not have the luxury of time,” he said.

OUTA (the Organisation Undoing Tax Abuse) also welcomed the new Denel board and Minister Gordhan’s “promises to hold wrongdoers accountable and follow the money” in an obvious reference to State Capture and the apparent influence the Gupta family had over the massive defence and technology group. Gordhan himself said Denel had been a victim of and took part in state capture. This came to light in the proposed Denel Asia joint venture and the use of Gupta-connected VR Laser as a contractor on certain Denel projects, including Badger, the new infantry combat vehicle for the SA Army.

“Decisive action is taking place, after the country begged previous Minister Lynne Brown to appoint competent, dedicated and incorruptible directors at SOEs,” Rudie Heyneke, OUTA Portfolio Manager for Transport, said.

“The new Denel board follows the appointment of a new Eskom board in January and shows the Executive is busy with a clean-up operation at SOEs as explained by President Cyril Ramaphosa.”

He hoped the new Denel board would review business processes, focus areas and key individuals in the organisation. “Denel may need some major surgery after the effect of the Guptas are exposed and analysed.”

Democratic Alliance (DA) shadow public enterprises minister Natasha Mazzone “cautiously welcomed” the new interim board – it still has to be finally approved by Cabinet.

“The DA finds it unhelpful that Minister Gordhan has chosen to retain some individuals who served on the previous board.

“Denel’s previous board and management still needs to account before the Commission of Inquiry into state capture to be headed by Justice Raymond Zondo. South Africans need a full account of the circumstances that saw the Gupta brothers gain undue influence on some of the company’s high level business decisions.

“Denel fell prey to gross mismanagement and a carefully orchestrated plan of ‘state capture’ that saw the state armaments company fail to pay its employees and suppliers, forcing government to shore it up with a R580 million guarantee.

“The new interim board has to ensure it extricates Denel from undue political influence as an essential first step in restoring the company’s tattered corporate image,” Mazzone said.
 

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