Kgobe takes over as Denel interim chief executive

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While the Denel board applies its mind to finding and appointing a new permanent group chief executive, a former acting chief executive is now in the hot seat as an interim.

On Thursday (September 1) Mike Kgobe took over the reins from William Hlakoane as interim Denel Group CEO. The move was necessitated by Hlakoane’s contract expiring on 31 August and it appears he was either not offered an extension or decided against staying on.

Kgobe’s appointment was not, in normal Denel fashion, announced via a company press statement or by the Department of Public Enterprises (DPE), representing the shareholder (government). Instead it went through the Johannesburg Stock Exchange (JSE) news service – SENS (Stock Exchange News Service).

The announcement makes no mention of the period the former chief executive of Denel Aviation, the forerunner of Denel Aeronautics, will be in the CEO suite at the Centurion headquarters.

Kgobe has an aeronautical engineering background and has been with Denel since May 2000, moving through management ranks to Denel Aviation chief in 2010.

He has hands-on experience of the group’s chief executive function, being acting in 2018.

While not stated, it is expected Kgobe will work closely with another former Denel chief executive, Riaz Saloojee. He was one of those summarily dismissed at the height of the hollowing out of the State-owned enterprise (SOE) during State Capture.

Without any fanfare, apart from an internal memo, Saloojee was in May named chief restructuring officer for Denel.

The memo had it Saloojee will be integral to fast tracking implementation of the “approved Denel five year strategy” and ensuring the troubled SOE is restored as “as a strategic national asset.”

As with Kgobe’s appointment, Saloojee’s was announced without a timeframe.

Earlier this week a Denel presentation to a Parliamentary Portfolio Committee was cautiously optimistic, stating significant changes are coming ahead of “a credible future”.

Denel’s strategic intent is to “reduce dependence” on the fiscus (read National Treasury) and recapitalisation “will set” Denel on a solid basis with restructuring rightsizing it to “current revenue levels”.

Exports, the Public Enterprises committee heard, will increase economies of scale to support funding of strategic and sovereign capabilities.

“These will be managed through ring-fencing and flexible resourcing to minimise the impact of rapid declines in exports like the cliff face experienced during the COVID-19 pandemic.”

In another optimistic prognosis the presentation has it “in-country capabilities will minimise the cost of securing and maintaining strategic capabilities” while “alignment” with Armscor and the Department of Defence (DoD) will be done on sovereign and strategic capabilities. Funding will be identified and articulated via a formalised tripartite memorandum of co-operation between the DoD, representing the SA National Defence Force (SANDF), Armscor and the Department Public Enterprises (DPE), representing Denel.