Minister still waiting for report on Denel top trio suspensions

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Indications are Public Enterprises Minister Lynne Brown will finally receive a report on the reasons for placing a top trio of Denel executives on special leave next week.

The three – chief executive Riaz Saloojee, chief financial officer Fikile Mhlontlo and group company secretary Elizabeth Africa – were suspended, with immediate effect, following a Denel board meeting late in September. At the time Minister Brown’s office indicated she was expecting a report on the suspension within two weeks.

Earlier this week she told Johannesburg Chamber of Commerce and Industry members she was now expecting a report by December 10 and would make a determination as to what action she would take early in the new year. She again stressed Denel was able to meet its financial obligations.

This follows allegations by the opposition Democratic Alliance (DA) party that contractors and suppliers to the State-owned defence industry conglomerate were not being paid.

Natasha Mazzone, DA shadow public enterprises minister, said a request for information on the situation at Denel had been made in terms of PAIA (Promotion of Access to Information Act).
“As of today we have still heard nothing. Our request expires on December 15 and if there has still been no response I will obviously again submit the request for information on Denel,” she said adding there were “many stories” coming her way about the group.

Requests to Denel’s public affairs office for information on the current management in place were referred to Minister Brown’s spokesman who had, at the time of publication, not responded.

The trio were put on special leave by a new Denel board, appointed by Brown as part of a rotational policy in use at state-owned companies. Announcing the new Denel board Brown said she encouraged them to work closely with the Denel executive to “solidify operations”. One of her emphasis points for the new board, headed by chairman Daniel Mantsha, were strategic partnerships in South Africa, the southern African region and the continent.

Denel’s latest financial statements, released in July, indicated the group’s future was positive with an order book in excess of R35 billion, triple the value of secured orders a few years ago. Revenue grew by 28% to R5.85 billion attributed mainly to exports which account for more than half of Denel’s total revenue. A net profit of R270 million – an increase of R76 million on the previous year – was reported.



Industry speculation at the time of the suspension was that it was tied in with the acquisition of BAE Land Systems Land Systems Africa, now renamed Denel Vehicle Systems (DVS) which exhausted Denel cash resources. This was refuted by Brown.