Government defends Guptas, Denel

FILE PICTURE: Lynne Brown. Picture: Gallo Images / Foto24 / Danielle Karallis

FILE PICTURE: Lynne Brown. Picture: Gallo Images / Foto24 / Danielle Karallis

Analysts say there is a sound legal basis for his removal from office or a vote of no confidence.

The Department of Public Enterprises (DPE) said it would not comment on the legality of the controversial joint venture between state-owned arms corporation Denel and the Gupta-associated company VR Laser.

The department had given pre-approval for the partnership, prior to its announcement, with “strict conditions” that have yet to be met by Denel.

DPE Minister Lynne Brown’s spokesperson, Colin Cruywagen, said yesterday: “We still stand by what we have said two weeks ago: the minister is still waiting for the rest of the conditions to be met before final approval can be granted.”

Last month the two entities formed a joint venture under the company name Denel Asia, which was registered in Hong Kong.

Business Day reported yesterday that Denel Asia was formed with the intent to sell Denel arms in Asia.

However, the DPE announced earlier this week that the venture had not been finalised.

The legality of the deal had come into question after it emerged that neither Treasury, nor the DPE, had given final approval for the venture.

Section 54 of the Public Finance Management Act (PFMA) stipulates that in order for a public entity to form such a venture, it must be approved by both departments.

The deal, which was announced last month by Denel, was not well received by utilities union Solidarity and the DA.

The opposition party has said that it would ask Treasury not to sign off on the deal, which they describe as “irregular”.

It has also accused the state entity of acting outside of its authority by announcing the deal prior to approval. Meanwhile, the office of the public protector yesterday confirmed the receipt of a letter from Solidarity requesting that Thuli Madonsela investigate the deal.

During yesterday’s State of the Nation debate, Malema again took aim at the Gupta family, saying that President Jacob Zuma only appointed ministers with “close relations” to the Gupta family.

“Those ministers immediately start negotiating business deals for the Guptas and his [Zuma’s] son,” he claimed.



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