Denel asset seizure ongoing


A five-year turnaround plan for Denel is not paying outstanding and currently due salaries despite a commitment to “work tirelessly” to remedy this blot on the State-owned enterprise’s reputation with trade union Solidarity taking further legal steps to correct the reward of effort with income – a basic employee right.

The announcement by interim chief executive William Hlakoane of a five-year plan to restore Denel to profitability and see the defence and technology conglomerate in a position to respond to at least some equipment needs of the South African security sector, including the SA National Defence Force (SANDF) and SA Police Service (SAPS), drew muted approval from the Centurion-headquartered labour organisation.

“Solidarity supports disposing of non-critical divisions such as Mechem to loosen up much-needed cash,” Derek Mans, a Solidarity defence and aerospace specialist told defenceWeb.

Mechem is based on Denel’s Lyttelton, Centurion, campus and was originally a CSIR-led effort tasked with research and development of mechanical and chemical solutions to defence related problems leading to the name Mechem being adopted. The end of what is widely called the Border War in the 1980s saw Mechem change focus from largely research and development to demining with commercial demining starting in 1991.

Mechem services are listed as explosive remnants of war (ERW) clearance solutions; specialised canine products and services; mine protected vehicles and ancillary equipment as well as related skills and field facility services. It is a subsidiary of Denel Land Systems (DLS), major contractor for the seemingly doomed new SA Army infantry combat vehicle, apparently set for disposal in Hlakoane’s plan.

Solidarity is adamant Denel – in one form or other – must remain. “It is of critical import, because without Denel the SANDF’s ability to fulfil its Constitutional mandate is under risk, also putting South Africa’s sovereignty at risk,” Mans said.

He maintains the Hlakoane’s plan “at least assesses what is needed for future sustainability as the current kicking of the proverbial can down the road is not going to pay salaries or retain skills”.

Solidarity has again been to court – this time late in July – on the unpaid and short paid salaries and employee benefits issue in an effort to hold Denel directors personally liable for non-payment, Mans said, adding salaries were settled in some Denel divisions “but not all”.

“The court granted the directors up to 2 December to settle outstanding monies while applying judicial oversight.”

To date Denel assets valued at R1.35 million have been seized by the Sheriff with Solidarity, via its attorneys, seeking continuation of asset seizure with “specific representative amounts per (Denel) division”.

Denel has not been able to pay full salaries to its more than 3 000 workers since April 2020, and owes staff more than half a billion Rand.