Oversight committee calls for further Denel explanations

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Beleaguered State-owned defence and technology group Denel, in the form of its acting chief executive, has to return to the drawing board to provide an explanation for at least some of its woes.

This was done in the form of a media statement by the Select Committee on Public Enterprises following a presentation to it earlier this week.

The statement reads, in part: “The committee told Denel it must return to brief the committee on the turnaround strategy’s performance and plans to restore its reputation and workers’ morale”.

Committee chair Tshitereke Matibe is quoted in the statement as saying: “Denel management must also experience the pain of salary interruptions and cuts. It can’t be just general employees who feel the consequences of the decline in productivity at Denel in the form of salary cuts or no salaries. Management must also feel the crisis”.

This was in direct reference to Denel’s failure to pay full salaries and employee benefits since the middle of last year.

Briefing the select committee earlier in the week Talib Sadik, acting chief executive, said despite a turnaround strategy, Denel has a liquidity crisis and its order book is “is exposed to significant risk”.

Denel reported an audited loss of R1.9 billion in the 2019/20 financial year caused by, among others, “a significant decline in revenue,” parliamentarians heard.

They, according to the statement issued by Parliamentary Communication Services, heard Denel is “structurally and operationally inefficient, revenue generation, programmes and cash management need to be reformed, while costs must be reduced”.



No date is given for Denel’s re-appearance at the public enterprises oversight committee.