Denel makes it to the State Capture Inquiry


Justice Raymond Zondo’s Commission of Inquiry into State Capture has received its first submission regarding alleged and apparent wrongdoing in the South African defence industry.

The submission, compiled by the organisation Undoing Tax Abuse (OUTA), is on the State-owned defence and technology conglomerate, Denel. The first inkling of its involvement in corruption was when East Gauteng-based VR Laser, a regular supplier to Denel, was publicly named as a Gupta affiliated company. Links were apparently uncovered between it and a planned joint venture to access the Asian military market via a Hong Kong-based business, Denel Asia.

OUTA portfolio spokesman for transport, Rudie Heyneke said the Denel submission was the first of a number building on its report “No room to hide: a president caught in the act” to Parliament last year.
“OUTA’s state capture submissions aim to outline how appointees under former President Jacob Zuma’s leadership manipulated policies and entities in the interests of themselves or the Guptas, rather than the country.
“In OUTA’s submission, the organisation shows how Denel moved from being a profitable company with an order book of more than R35 billion in 2015 to an entity which came perilously close to handing over defence technology to the Guptas.
“Under Minister Lynne Brown’s direction, the Denel board was replaced in 2015 with a board which planned the capture of the entity. She approved the appointment of a new chairman – lawyer Lugisani Daniel Mantsha, once disbarred then reinstated and now Zuma’s lawyer.
“In September 2017, OUTA laid charges of corruption against Mantsha over his Denel activities, specifically the Denel-Asia venture with the Guptas to supply weapons to the Asian market. This involved an attempt to transfer Denel technology, intellectual property and training to a joint venture with the Guptas.
“Former Denel chief executive Zwelakhe Ntshepe was implicated in this deal, blocked by National Treasury and which ultimately collapsed.
“OUTA believes the board set up by Brown took decisions on Denel which did not make commercial sense but were aimed at lining the Guptas’ pockets in a massive state heist,” Heyneke said.