Denel has vowed to oppose the court action brought by National Treasury in a bid to stop a joint venture company linked to the controversial Gupta family, Denel Asia, accusing Treasury of political “grandstanding”.
“Denel views the threat by the National Treasury to bring a court action to stop the Denel Asia joint venture as political, sheer opportunism and grandstanding,” Denel said in a statement.
The state-owned defence conglomerate said it had served the National Treasury with a pre-notification that it intended to establish Denel Asia in October last year.
But Denel said it was only when the name of the Guptas was “mischievously” linked to Denel Asia that National Treasury sent a letter to request further information from Denel. It added that this was “purely motivated by a hidden agenda”.
“The allegations that Denel is ‘captured by the Guptas’ are unfounded and politically motivated. The Gupta family has no business joint venture with Denel, and none of the Gupta family members or relatives are shareholders in Denel Asia.”
Denel Asia is a joint venture between steel products firm VR Asia, which is partly owned by the Gupta family. It is putting up R100 million to fund the business with Denel to share 51% of the profit.
Denel said it was strange that the National Treasury was frustrating the Denel Asia joint venture when it had approved a move by Denel to borrow R855 million from commercial banks to acquire the business as to enable it to grow its business and generate revenue for the State.
Denel said Treasury’s litigation to halt the joint venture would be a violation of Chapter 3 of the constitution, and Denel would vigorously oppose it.
“The Denel board was called ‘arrogant and belligerent’ by the minister of the National Treasury, [Pravin Gordhan], who is unable to back such allegations,” Denel said.
Treasury’s spokesperson Thabisa Whittington was not immediately available for comment.
– African News Agency (ANA)