Denel bosses draw top pay amid cash crisis

The top management of state-owned arms and aerospace company Denel received salary increases of up to 60% last year, despite having difficulties in paying employees their full salaries in December, according to trade union Solidarity.

In a report titled Denel Dossier, they revealed that the company adjusted the group CEO’s total cost to company from R2.5 million to R4 million. This R1.5 million increase went above the benchmark of R3.6 million.

“Denel has also been bailed out of financial difficulties by the government through several assistance packages and they threatened to retrench hundreds of workers,” said Solidarity CEO Dirk Hermann. “In spite of Denel’s financial crisis, top management also received performance bonuses of 100%.”

The union was also concerned that at least 700 people would be left unemployed due to unethical expenditure.

“Solidarity requests that Denel’s top management, including group CEO Zwelakhe Ntshepe and chief financial officer Odwa Mhlwana, be suspended pending a forensic investigation,” Hermann said.

Denel received a R580 million bailout from National Treasury last year to pay employee salaries.

Hermann said the arms manufacturer received a R9.4 billion cash injection over 15 years, receiving R1.13 billion since the appointment of a new board in 2015.

Earlier this week, the company denied unlawfully granting a bursary to the son of North West Premier Supra Mahumapelo to the tune of R1.2 million, to go to an aviation school.

In a statement, Denel said such allegations were false and that the bursary was awarded to three students based on the “same criteria and/or considerations”.

“The award was made in compliance with Denel’s relevant policy after a full disclosure and presentation to the board of directors of Denel, which has noted without objection,” the statement said.

But according to the dossier, the company’s bursary policy only allows for sponsoring financial and accounting studies, business management, computer and engineering science.

“The dossier will be handed to Minister [of public enterprises] Pravin Gordhan,” the statement read.

Also read: Solidarity threatens action against SoEs, slams Denel’s bursary to Mahumapelo

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