Denel denies Gordhan’s assertion that its board is arrogant and belligerent

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The Denel board has denied that it or its executives are arrogant or belligerent, after comments by finance minister Pravin Ghordhan to that effect.

Gordhan was speaking during the debate on the Treasury budget vote in Parliament on Wednesday. African Christian Democratic Party (ACDP) MP Steve Swart said that Denel is going ahead with Denel Asia, a joint venture between itself and VR Laser, which is linked to the controversial Gupta family, in spite of lacking the necessary approval from Gordhan. Swart suggested the finance minister was being undermined by a lack of political support.

In response, Gordhan said that, “One of the tendencies that we are noting in recent times is that when boards are beginning to do things that they are not supposed to do, they begin to display a level of arrogance and belligerence that does not befit them and…the board of Denel need to take that message to heart.”

In response, Denel’s board today issued a statement saying “the Minister‘s accusations are unsubstantiated, baseless and unfounded. Denel executives have in recent weeks met with National Treasury officials twice, addressing the misunderstanding relating to the establishment of Denel Asia. During the two meetings, amongst other things it was agreed that neither National Treasury nor Denel would unilaterally make public statements on these matters until such time discussions are concluded.
“The Denel board is taken aback by the Minister’s statements which are a clear violation of the undertakings given by National Treasury and also a flagrant violation of chapter 3 of our constitution. We appeal to the Minister to refrain from making such comments and allow the engagement between Denel and National Treasury to reach its finality.
“The Denel board will continue to observe the highest standards of governance, and will above all ensure that applicable legislation like the PFMA [Public Finance management Act] is compiled to in full, not only its letter but also its spirit. The establishment of Denel Asia was done in compliance with section 51(1) (g) and section 54 (2) and (3) of the PFMA.”

Gordhan stated last month that the registration of Denel Asia, the formation of which was announced in January, was illegal and contrary to the Public Finance Management Act. Allegations emerged that Denel Group CEO Riaz Saloojee was removed last year to make way for the joint venture.



Public Enterprises minister Lynn Brown expects the investigation into the suspension of Saloojee, as well as chief financial officer Fikile Mhlontlo and group secretary Elizabeth Africa to be completed by the end of June, more than six months later than planned. Denel recently announced that Saloojee’s contract has ended and he will not be returning to the company.