Parliamentary committee “concerned” about Denel


Parliament’s Portfolio Committee on Public Enterprises is “concerned” about governance and financial issues at State-owned enterprise (SOE) Denel.

This was how committee chair Khaya Magaxa responded, in part, to the presentation by Talib Sadik, acting chief executive of the haemorrhaging defence and technology group, earlier this week.

Committee members are reportedly concerned by Denel having a low equity figure, “despite an equity injection of R1.8 billion in the 2019/20 financial year”. Denel, according to a Parliamentary Communication Services statement, received R305 million of the R576 million allocated it in the 2020/21 financial year Medium Term Expenditure Framework (MTEF).

“Committee members noted they had previously raised issues and asked questions to assist Denel to plan more efficiently for the future, but Denel took no action,” the statement said.

“The committee believes government and State-owned companies should be trading among themselves in business, skills and capacity. Additionally, Denel should look beyond the Department of Defence (DoD) and Armscor to market its products.”

There was further criticism of the Denel presentation with the committee of the opinion it lacked timeframes and “did not specify when actions will be executed in dealing with identified challenges”.

The Parliamentary statement comes a day after trade union Solidarity indicated, by way of a letter, it had enough of Denel management’s lack of action in instituting any turnaround strategy. The letter was sent to Cabinet ministers Nosiviwe Mapisa-Nqakula (defence and military veterans), Tito Mboweni (finance) and Pravin Gordhan (public enterprises) as well as Denel’s board of directors.

The trade union is adamant government is not accepting responsibility for its State-owned entities which, apart from Denel, include Eskom and SAA.

“Historic mismanagement and maladministration committed by the state and its cohorts are why Denel cannot stay afloat financially,” a sentence in the Solidarity letter reads.