Denel successfully weathered a liquidation attempt this week but still faces a myriad of problems – mostly financial – and has also not met the legal requirement for reporting to Parliament.
Even though Parliament – both the National Assembly (NA) and National Council of Provinces (NCOP) – is currently in recess ahead of the 1 November local government elections, the non-appearance of the State-owned defence and technology conglomerate’s latest annual report has not gone unnoticed.
Michele Clarke, Democratic Alliance (DA) shadow deputy public enterprises minister, this week confirmed to defenceWeb that no Denel annual report for 2020/21 has yet been received.
“Denel’s annual report for the previous financial year was not submitted on time in terms of legislative requirements,” she said, adding the current non-appearance would be taken up with Public Enterprises Minister Pravin Gordhan, who oversees Denel and other state-owned entities.
“I am not surprised given the financial mess Denel finds itself in but providing an annual report is a basic requirement. Further, the responsible minister should keep entities under his control accountable,” she told defenceWeb.
As an opposition parliamentarian keeping a weather eye on what is – and isn’t – happening at the State-owned enterprises (SOEs) where Gordhan’ Public Enterprises Ministry is government’s – and the sole – shareholder, Clarke regularly asks questions.
In response to one, she was told one Denel company – Denel Vehicle Systems (DVS) – lost 173 technically skilled personnel in the past three years. The current DVS headcount for this level of employee is 157.
Earlier this week a Saab Grintek Defence application for Denel to be liquidated was settled out of court, providing some respite from ongoing financial issues facing the Irene, Centurion, headquartered SOE.
These include continuing short and non-payment of salaries and employee benefits including medical and pension (court orders to the contrary notwithstanding) and a business rescue bid launched by the Denel Employees Association (DEA). As far as can be ascertained this has not reached the North Gauteng High Court in Pretoria as indicated by lawyers acting for DEA, a grouping Denel maintains it has no knowledge of.
Clarke also sees business rescue as bringing relief to Denel. In April she called on Gordhan to implement a business rescue process, stressing it should not go the same route as that employed at the national carrier SAA.
She said at the time: “There is no way forward other than for Denel to be placed under business rescue. If there isn’t an urgent intervention the entire entity will collapse. It is important business rescuers take over the running of the arms manufacturer and formulate a credible business rescue plan to create order”.