Denel and National Treasury called to Parliamentary committee on Denel Asia joint venture

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The war of words between Denel and National Treasury as regards the state-owned defence industry conglomerate’s planned entry into the Asian market via a joint venture with a Gupta-linked company should come to an end tomorrow (Wednesday).

That’s when Parliament’s Public Enterprises Portfolio Committee meets and senior representatives of both are expected to attend at the behest of Democratic Alliance (DA) shadow public enterprises minister Natasha Mazzone.
“Last week I made two requests, one in a member’s statement made in the National Assembly for Minister Brown to come out of hiding and address the chaos in SOEs (State-owned enterprises). On Wednesday, Denel together with treasury is coming to report to the Public Enterprises portfolio, at my request. It is the only way is we will get to the bottom of who is lying to whom.”

She wants answers to five questions relating to Denel Asia.

They are: why do we need a middleman company if Denel already has a stable and healthy footprint in Asia; how and why were the partners chosen; why is there animosity between Denel and treasury; who is instructing Denel to seemingly ignore treasury requests and requirements and was the previous, or current, Denel board responsible for the loans and conditions?

Denel maintains there was “nothing wrong” in setting up the joint venture between one of its subsidiaries and VR Laser to create Denel Asia. This Mazzone said was refuted by National Treasury which is “ready to go to court” to stop it becoming reality.

In a statement issued at the end of last month Denel said any court action brought in connection with the Denel Asia joint venture was “political, sheer opportunism and grandstanding”. It added any litigation would be “vigorously opposed”.

According to Mazzone VR Laser is apparently close to 65% owned by a Gupta business partner, Salim Essa, with a further 25.1% owned by Westdawn Investments, whose majority shareholders are Duduzane Zuma and Rajesh Gupta.
“VR Laser Asia is 100% owned by Mr Salim Essa. It also cannot be ignored that VR Laser Asia has no footprint or expertise in the Asian market. This joint venture therefore makes no strategic sense,” she said.