Denel CFO on leave while investigations underway


The new Denel board, confirmed late last month by Public Enterprises Minister Pravin Gordhan, is tackling at least some of the irregularities which have seen the defence and technology conglomerate accused of corruption.

Afrikaans weekly Rapport has it that board chair Monhla Hlahla last Friday called in Denel chief financial officer, Odwa Mhlwana, and gave him a choice of either suspension or leave pending finalisation of disciplinary charges against him. He chose the latter.

The charges apparently have to do with irregularities surrounding a bursary of more than R1 million awarded to Supra Mahumapelo Jnr, as well as a security contract apparently awarded to Tau Mahumapelo, brother of former North West Premier, Supra.

The new chair, who replaced Daniel Mantsha, said Denel would consider criminal charges against those involved in the bursary and security tender once investigations were finalised.

She is also reported as saying Denel would not recover the money paid to 20-year-old Supra Oarabile Mahumapelo because there were no indications he had done anything wrong and because the Denel board had to focus on the bigger issue of wasteful expenditure. Mahumapelo Jnr was awarded the bursary enabling him to study for an airline pilot’s qualification at 43 Air School in Port Alfred in January 2017. Two other students at the respected Eastern Cape air school received similar bursaries.

Earlier this year, before he apparently decided to go on a “sabbatical” from his premiership, Mahumapelo told a public meeting in North West he would pay the bursary back in full if it had been irregularly awarded. He did not respond to questions asked of him by the newspaper.

Hlahla reportedly told the newspaper “details of the scale of wasteful expenditure have been leaking everywhere”.

Earlier this month Denel was granted an extension on debt of R690 million, with no details of the timeframe given for repayment.
“We can no longer justify paying people responsible for wasting Denel’s money massive salaries – not when ordinary employees are wondering whether they will still receive a salary next month,” Hlahla said.

That is why she personally gave Mhlwana an ultimatum. According to her, the recent forensic investigation by law firm ENSafrica has already delivered valuable evidence from whistle blowers, in addition to that obtained from Denel records.

The new Denel board is investigating a number of allegations, including some made by trade union Solidarity, concerning irregular expenditure at the State-owned defence and security conglomerate. The Centurion-headquartered labour organisation was originally in correspondence with Gordhan’s predecessor, Lynne Brown, and carried forward the allegations with the former finance minister when he was named as Public Enterprises Minister by President Cyril Ramaphosa.

Solidarity today welcomed the “long-awaited” action taken against the remaining members of the Denel top four. According to Solidarity Deputy General Secretary Deon Reyneke, Solidarity and its members still had the expectation following the resignation of the Denel Group’s former CEO, Zwelakhe Nthsepe, in May 2018 that further investigations and steps would be instituted in the wake of Solidarity’s Denel Dossier it had submitted to the Minister of Public Works and the chair of the Denel Board in April this year.
“The dossier contains allegations linking every member of Denel’s top four to mismanagement, and this amidst the Denel Group’s extremely poor financial performance,” Reyneke said.

Reyneke also said that the suspension of Odwa Mhlwana is another step in the direction of restoring Solidarity members’ confidence in the Denel Board and its executive management.

Solidarity members are all but happy with Denel’s offer of a 4% salary increase for 2018, while Denel’s executive management received salary adjustments of 47% and more during 2017. “The latest developments will make a significant difference in our members’ focus to support the Denel Group and its Board in the process towards financial recovery,” Reyneke added.

Reyneke pointed out that Solidarity members believe offenders at top management level should be held accountable before employees have to carry the can for the financial conundrum the group finds itself in. “We are also calling for further investigations and deliberate action, when justified, to deal with the remaining two of the top four executives. There is an expectation among employees that firm action will be taken against executives who violate rules in the same way as employees who fail to perform their duties are dealt with,” Reyneke said.
“Solidarity commends the resolute action taken by the Minister of Public Works and the Denel Board to hold Denel’s top executive accountable and to restore employees’ faith in the survival of this state enterprise,” Reyneke concluded.