Trade union Solidarity has announced that it is approaching the High Court to compel Denel to make a host of outstanding payments towards the benefits and tax contributions of Denel staff.
In a speech released by Dr. Dirk Hermann, Solidarity Chief Operating Officer on 31 July, entitled, “Solidarity shows Denel a tax fist”, the trade union slams Denel for using employees’ salaries to subsidise cash flow as well as refraining from making compulsory payments to the revenue service despite Denel stating on employee payslips that it had been done.
In addition to approaching the High Court, Solidarity also stated that in accordance with section 165 of the Companies Act, companies can be compelled to investigate and rectify wrongdoings through civil law actions and criminal prosecutions and Solidarity has started with this process
Solidarity prepared the Denel dossier which is said to contain evidence of wrongdoing and corruption at the state-owned company. It was then handed over to Denel. In response to Solidarity’s section 165 process and the prepared dossier, Denel’s Executive Officer, Danie du Toit, stated that they (Denel) conducted many forensic investigations and that Denel continues to undertake civil and criminal law actions against several former executive directors and senior management.
In a letter from du Toit to Solidarity’s legal team, it was stated that Denel:
“Has instituted civil action against four former Denel executives to recover the monies lost through the awarding of the pilot bursaries;”
“Is currently compiling a statement to be submitted to the South African Police Service laying complaints against some of the former executives of Denel based on the forensic reports;”
“Is currently in the process of lodging an application in the High Court to review the contract concluded between Denel and VR Laser;”
“Is, pending the legal review of the forensic reports received, initiating disciplinary actions against the Denel employees implicated in those reports; and”
“Is currently working on assessing the quantum of the loss Denel might have suffered due to the actions of the Denel executives and/or former executives. This will lead to the institution of civil claims to recover the losses as recommended in the forensic reports.”
Solidarity believes these steps taken to be a major breakthrough in their fight against tax abuse and state capture.
Solidarity went on to state that the steps taken against Denel form part of a much larger campaign, “Solidarity’s legal tax protest”. Solidarity plans a similar section 165 action against Eskom, in conjunction with Sakeliga. This involves former Eskom CEO Brian Molefe – a cost order was issued in the case that Solidarity won in the High Court pertaining to Molefe’s unlawful enrichment from the Eskom pension fund. In addition to this, Solidarity also plans to make an application for South African Airways (SAA) to be placed under business rescue.