Possible Denel IP theft being investigated


South Africa is investigating alleged misappropriation of intellectual property (IP) rights belonging to state defence firm Denel, the Special Investigating Unit (SIU) has confirmed.

The IP relates to air-to-air missiles, stand-off weapons, surface target missiles, air defence and unmanned aerial vehicle systems, the SIU told Reuters.

“The focus area for the investigation is unlawful, irregular or unapproved measures or practices in relation to misappropriation of proprietary and intellectual property rights,” the SIU said.

Denel told Reuters the claims initially surfaced last year and were looked into.

“Denel did report allegations of IP theft to the relevant authorities who investigated the matter and found no substantiating evidence of impropriety,” the company said in a statement.

Denel employees are alleged to have inappropriately passed information to Saudi Arabian Military Industries (SAMI) during talks over a potential partnership, City Press newspaper reported.

Saudi Arabia’s state defence company did not respond to a Reuters request for immediate comment.

South Africa’s President Cyril Ramaphosa authorised the SIU inquiry last month, according to the Government Gazette.

The SIU is investigating possible corruption and mismanagement at Denel during the administration of former President Jacob Zuma under a broader probe. This, for example, allegedly saw Gupta-linked associates acquire IP for the Denel Mechem Casspir armoured personnel carrier.

Saudi Arabia, the world’s third largest defence spender, is seeking partnerships to develop its own defence industry. Last year it made a $1 billion bid for a partnership with Denel.

Among others SAMI would finance research and development of Denel Dynamics, the division producing tactical missiles and precision guided weapons.

Denel Chief Executive Danie du Toit told Reuters earlier this year the company was open to partnerships but would not sell equity or relinquish IP rights to SAMI.

As recently as July, SAMI said it was still in commercial talks with Denel.