Former Public Enterprises Minister participated in Denel “capture” – Zondo

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It’s about as official as can be that “State Capture” took place at Denel and other State-owned enterprises (SOEs), transforming once profitable businesses into husks.

This was further confirmed earlier this week with the release of the second part of the Zondo Commission’s report into its findings on State Capture. Part two dealt only with Denel and Transnet, running to over 600 pages, with names named and transgressions, as given in evidence, there for all to see.

Denel slipped from an internationally respected defence and technology manufacturer and supplier to being one on its knees, Deputy Chief Justice Raymond Zondo’s report states.

He, in the light of what were seemingly political appointments to boards of directors, wants a sea change with no politicians involved in the future.

Two former incumbents of the ministerial suite of offices in the Department of Public Enterprises (DPE) – Malusi Gigaba and Lynne Brown – were economical with the truth at best in their evidence presentations. Brown, according to Zondo, participated in the Gupta takeover bid, via VR Laser, while the Deputy Chief Justice said Gigaba was not a trustworthy witness.

In the 2011/15 period, the Zondo report says, Denel functioned well under then chief executive Riaz Saloojee. A new board with Daniel Mantshe as chair was named by Brown in 2015 and “one of its first decisions” was to suspend Saloojee along with chief financial officer Fikile Mhlonto and company secretary, Elizabeth Africa.

“Consequently, from the second half of the new board’s first year in office and the whole of their second year Denel was without these exceptional performers, namely the 2011 board and the group chief executive.

“The result in the following year tells it all. In media reports Denel is now associated with liquidation and business rescue.”

Of Brown, Zondo said in part: “The assertion by Brown that she cannot remember anything about [the] conversations is rejected. She told a deliberate untruth in this regard. Why would she lie about her telephone conversations with [Gupta lieutenant Salim] Essa?

“The only possible conclusion is Brown was a witting participant in the Guptas’ schemes to capture Denel and Eskom.”

Part two of Zondo’s report states further Brown participated in State Capture at Denel by using her power to install on boards individuals she believed, and probably because she was told so, would facilitate or at least not oppose the capture of the state by the Guptas.

Giving evidence to the Commission, Saloojee said he was taken to the Guptas’ Saxonwold compound by Gigaba and introduced to the brothers with a view to “business”. He turned this down and informed the erstwhile Cabinet Minister what he (Gigaba) was doing was not right.

Zondo expressed concern at Mantsha’s appointment as Denel chair saying it was “particularly problematic as he was “previously struck off the roll of attorneys for long lists of acts of misconduct”.

To prevent future appointments of this nature, with their inherent attached problems for the SOE concerned, Zondo recommends establishment of an independent body to identify, select and recruit “the right kind of people” to lead boards and organisations. He indicated details of this body come in part three of his report, due by the end of this month (February).