Corruption has brought Denel to ‘its knees’

Part two of the Zondo report released on Tuesday has revealed that Denel, which was once highly regarded internationally, 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, in particular the South African National Defence Force (SANDF). It created a level of harm and damage to the entire aerospace industry, which could not at this
stage be repaired.

He said the problem with state capture was that it had disrupted the entire process of Denel’s recurring revenue, while it sucked out the capital from the business and cut down operations in many areas.

“So what we have today is that Denel has extensively collapsed, there are very few parts of Denel that are still working correctly and others that are doing some work for the airforce in terms of maintaining its aircraft, but it’s
all at a much lower scale,” Olivier said.

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He said large parts of the company had shut down and what was worse, hundreds of extraordinarily skilled engineers, who had been there for more than 10 to 20 years, had left the company and would not return.

“The impact of state capture for the work industry and the SANDF is dire; Denel was the key buyer from many of our smaller defence industry companies,” Olivier added.

“And [for] many companies that were involved in the hightech space as the high-tech in dustrial producers, a large proportion of their orders came from Denel and, with that gone, a lot of them closed their doors.”

Meanwhile, 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 the report revealed that 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. However, Duvenage said, the picture was already
clear, and it was now time to see some accountability.

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“We have known about them for years. They are liars and thieves, not fit for public office,” Duvenage said.

“There’s no turning back. People have to be held accountable: the president at the time, the ministers, the boards of the SOEs, all those who were complicit.”

The commission also said it was clear that the appointment of boards of directors and executives at SOEs cannot be left to politicians solely, as the appointees had failed to lead the institutions successfully.

Duvenage commended the report and said SA needed far more improved ways of bringing people onto SOE boards and positions of authority, as that was where the problems usually started.

– reitumetsem@citizen.co.za