The financially embattled Denel pulled a no-show on Tuesday at a meeting with parliament’s Standing Committee of Public Accounts (Scopa). The National Assembly Standing Committee on Public Accounts acts as Parliament's watchdog over the way taxpayers' money is spent by the Executive. Every year the Auditor-General tables reports on the accounts and financial management of the various government departments and State institutions.
The state-owned enterprise (SOE) was scheduled to appear before the committee to explain why it did not table its annual report, provide an update on its liquidity crisis, and receive an update on the investigations conducted by the Special Investigating Unit (SIU). However, the meeting was adjourned after Denel’s board snubbed Scopa, leaving members of the committee frustrated. Scopa chairperson Mkhuleko Hlengwa said the board’s no-show was disrespectful and unacceptable, and suggested that the board be recalled to appear before the committee. Economic Freedom Fighters (EFF) Constance Mkhonto said the board’s failure to show up could be a reflection of Denel’s current state.
She believed the board’s failure to show up could be a reflection of Denel’s current state. Hlengwa postponed the meeting to Wednesday next week, saying the board would be subpoenaed if it did not pitch. Denel is currently under a restructuring process carried out by the Department of Public Enterprises amid allegations of malfeasance against Public Enterprises Minister Pravin Gordhan. Denel was granted a R3.2 billion bailout by the National Treasury in February to help turn around the state arms manufacturer within the next two years. Denel is also being sued for R112 million by Armscor over contract failure.
Part two of the Zondo report revealed that Denel was now “almost on its knees”, as experts call for accountability for those implicated in destroying several SOEs. Darren Olivier, director of African Defence Review, said state capture has been very devastating for both aerospace and military tech conglomerate Denel and South Africa as a whole, particularly the South African National Defence Force (SANDF). He said the problem with state capture was that it disrupted the entire process of Denel’s recurring revenue, while it sucked out the capital from the The Organisation Undoing Tax Abuse (Outa) has called for President Cyril Ramaphosa to act against those heavily implicated in state capture, following the compelling evidence. Outa’s Wayne Duvenage said the “miscreants” named in the report were no surprise, as former Denel chair Daniel Mantsha, appointed by former public enterprises minister Lynne Brown, played a key role in capturing the state company for the Guptas. The Zondo commission recommended that law enforcement agencies investigate Mantsha and other board members for breaching the Public Finance Management Act. Duvenage commended the report and said SA needed more improved ways of bringing people onto SOE boards and positions of authority, as that was where the problems usually started.
