Three senior Denel executives, including chief executive Riaz Saloojee, have been suspended following a board meeting last Wednesday.
Chief financial officer Fikile Mhlontlo and group company secretary Elizabeth Africa are the other two “placed on special leave” with immediate effect, Fin24 reported.
The public affairs department of Denel said today it would not respond and referred questions to the Public Enterprises Ministry. Colin Cruywagen, Minister Lynne Brown’s spokesman, is reported as saying she is waiting for a report on the investigation that led to the suspensions and it was expected “within the next two weeks”.
Among the issues under investigation are recent acquisitions by Denel, which include that of BAE Systems Land Systems South Africa in April. Denel bought the 75% stake of the British aerospace and defence giant as well as the remaining 25% from BAE Systems’ partner DGD Technologies and has since renamed the company Denel Vehicle Systems (DVS).
Denel took majority ownership of the Benoni-based manufacturer of mine resistant ambush protected (MRAP) vehicles for R641 million, although the 25% stake acquired from DGD brought the total value to R855 million.
The decision to remove the three from the daily workings of the government-owned defence industry conglomerate was taken by a board of directors announced by Brown on July 25 this year.
The newly appointed Denel chairman, Daniel Mantsha, was struck off the attorneys’ roll in 2007 before being readmitted in 2011, leading to some questioning his appointment to the state-owned conglomerate.
When she announced the new board the Minister said she “encouraged” the new directors to work closely with the Denel executive team to “solidify operations”. One of her emphasis points for the new board was strategic partnerships in South Africa, the southern African region and the continent.
At the release of its annual financial statements in July Denel indicated the company’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 52% of Denel’s total revenue. A net profit of R270 million – an increase of R76 million on the previous financial year – was reported.