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Solidarity claims Denel “corrupt and captured”

The Denel dossier.Centurion-headquartered trade union Solidarity claims Denel top management received a 60% salary increase last year.

The union’s chief executive officer, Dirk Hermann, said the increases were awarded at a time when Denel did not have the necessary funds to pay employees their December salaries.

“Denel has also previously been bailed out by government with several assistance packages and the company threatened to retrench hundreds of workers.

“In spite of Denel’s financial crisis top management received performance bonuses of 100%,” Hermann said.

He maintains what the union has named the Denel Dossier must become part of Solidarity’s campaign again tax looting which follows a proposal to put national carrier South African Airways (SAA) under business rescue. This week’s court ruling against Brian Molefe to repay part of his R30 million Eskom pension is another component of the campaign.

Solidarity wants to see Denel top management, including chief executive Zwelakhe Ntshepe and chief financial officer, Odwa Mhlwana, suspended pending a forensic investigation.

The Denel Dossier has it the defence and technology conglomerate deducted money from employees’ salaries as part of a savings plan, to be managed on behalf of employees. Denel’s financial position was so dire that employees’ own money could not be paid, Hermann said, adding “Denel was supposed to manage the funds on behalf of employees. It seems the money was used to finance mismanagement”.

The Denel Dossier also alludes to division among Denel employees. A survey conducted by Denel apparently showed 82% of employees indicating they have no trust in the executive committee. A Solidarity survey had only eight respondents indicating they are neutral regarding Ntshepe, with 535 respondents saying they do not trust him.

“Proof of dozens of senior management staff who have left Denel recently has also been revealed,” Hermann added but did not give any details.

Solidarity also pointed to alleged violations of tender procedures and wants these probed.

At a media conference in Centurion today, Solidarity produced documents it said proved a R1.2 million bursary was awarded to Oarabile Mohamapelo, son of the North West premier, illegally.

“Denel has not escaped corruption or state capture. The Denel Dossier will be handed to Minister Gordhan with a view to further action,” Hermann said.

On 9 April Public Enterprises Minister Pravin Gordhan announced the appointment of a new board at Denel, and pledged to turn the company around, without resorting to retrenchments. Most of the old board had resigned by February this year, including the chairman, with only two original board members left.

Gordhan said steps are being taken to strengthen governance, root out corruption and restore the financial position of SOCs.