Embattled state-owned defence conglomerate Denel has announced the resignation of Board Chairperson Monhla Hlahla following a string of other departures from the Board of the loss-making entity.
In a notice to the Johannesburg Stock Exchange (JSE) on 25 February, Denel advised that Hlahla had resigned as an independent non-executive director and Chairperson of Denel, with effect from 24 February 2021.
The notice also said that Nonzukiso Siyotula resigned as independent non-executive director of Denel with effect from 24 February 2021.
The recruitment process of the Chairperson is underway and the appointment will be communicated to all debtholders in due course, Denel said.
Hlala and Siyotula’s departures are the latest to hit Denel, which at the beginning of the week announced that four directors had resigned since the 21 January Annual General Meeting, while interim Group CEO Talib Sadik has resigned as the director of Denel after his acting GCEO contract ended.
William Hlakoane was nominated by the Denel board to become the new interim Group CEO, with a six-month contract effective from Monday 22 February.
In a notice to the Johannesburg Stock Exchange on 22 February, Denel said General (Retired) Siphiwe Nyanda resigned from the Denel board effective 21 January 2021 while Kabelo Lehloenya resigned effective 14 January 2021.
Following Denel’s Annual General Meeting held on 29 January, Dr Sibusiso Sibisi resigned effective 16 February 2021 and Sue Rabkin resigned effective 18 February 2021.
Denel did not give a reason for the latest resignations, which deepen the crisis at Denel. Its fortunes have worsened during the COVID-19 pandemic, as some of its trade unions took the weapons manufacturer to court after it failed to pay full salaries during some months last year.
A company spokesperson referred all questions to the department of public enterprises, the main ministry responsible for Denel. A spokesperson there told Reuters the department would comment at an appropriate time.
Denel, a pillar of the country’s once-mighty defence industry, is one of a handful of loss-making state firms the government is trying to return to profitability.
Though the government has approved a turnaround strategy premised on asset sales and disposals, few have materialised. Sources at two local defence companies told Reuters their efforts to buy Denel assets have been rebuffed.
Denel made a R1.9 billion loss in the year to the end of March 2020, the last year for which financial results are available.
In a presentation in parliament this week, it listed among its problems: slow progress in selling non-core assets and exiting loss-making businesses, underfunding for projects of strategic national importance and a worsening debt profile.