More financial woes for Denel as unions approached

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Trade union Solidarity said today it “formally learnt from Denel that, as from this month, salary payments are in the balance due to a cash shortage”.

Johan Botha, deputy general secretary of the Centurion headquartered trade union which has members in a number of Denel companies and business units, said the latest development follows full salaries not being paid to senior personnel in September.
“Denel is in a financial quandary due to a history of mismanagement,” he said, adding the state-owned defence and technology conglomerate submitted options to trade unions regarding short time, salary and wage cuts and voluntary severance packages.
“This is as these can apparently provide relief as far as short term cash availability is concerned,” Botha said.

Denel management requested trade unions to consider the options, comment on them and/or submit counter-proposals.
“The proposals and the possible non-payment of salaries are worrying especially as we (Solidarity) are still waiting for feedback on progress made with investigations, possible action to be taken as a result of investigations and outstanding financial audit reports. Neither Denel nor its board can or has provided answers to trade union questions on these issues,” he said.

In April this year, Solidarity produced what it called “The Denel Dossier” containing allegations of financial mismanagement against the arms manufacturer. These included a 60% salary increase for top management, 100% performance bonuses and deducting money from employee salaries as part of a savings plan, to be managed on behalf of employees.

The Denel Dossier also alluded to division among Denel employees. A survey conducted by Denel apparently showed 82% of employees indicating they have no trust in the executive committee. A Solidarity survey had only eight respondents indicating they are neutral regarding now dismissed chief executive Zwelakhe Ntshepe, with 535 respondents saying they do not trust him.

Earlier this month it was reported Denel did not pay senior staff their salaries in full for September. This was confirmed by Denel spokeswoman Vuyelwa Qinga who told a news agency the cuts were due to “liquidity challenges”.

Executives were paid 80% of their salaries while specialists were paid 85%, she said adding regular employees were paid in full and the company was working with government to find a solution to its funding challenges.