Denel employees to get full salaries thanks to lender: Gordhan

Public Enterprises Minister Pravin Gordhan participates in the debate on the state of the nation debate, 24 June 2019. Picture: GCIS

Public Enterprises Minister Pravin Gordhan participates in the debate on the state of the nation debate, 24 June 2019. Picture: GCIS

Gordhan did not name the lender.

Staff at struggling state arms company Denel will be paid their full salaries after a lender came forward to extend the necessary funds, Public Enterprises Minister Pravin Gordhan said on Tuesday.

This announcement by the minister, made during the parliamentary debate on President Cyril Ramaphosa’s State of the Nation address, followed earlier reports that the company’s employees would only receive 85 percent of their salaries this month.

“Honourable members: you would have seen news headlines today that Denel will only be able to pay 85 percent of staff salaries for June, due to liquidity constraints,” Gordhan said.

“However, later in the day, the latest update is that a lender has come to the assistance of Denel and full salaries will now be paid to all the staff at Denel.”

Gordhan did not name the lender.

He singled out Denel as a prime example of the ravages of the rent-seeking scandal, known as state capture, that has gripped the government for several years.

“There is no clearer example of the damaging effects of state capture than the financial strain and uncertainty the 3,500 Denel employees and their families may face each month if the company’s liquidity problems continues,” he said.

“Denel, our producer of military and aerospace equipment, is a crucial and strategic state entity that was substantially harmed by state capture.”

The Zondo commission of inquiry into the scandal has heard evidence from former CEO Riaz Salojee that the politically connected Gupta family tried to bribe him and to influence his decisions.

National Treasury moved to block a joint venture between Denel and associates of the Gupta family.

Gordhan said steps had been put in place to return the company to sound footing, and it now had a potential pipeline of contracts worth more than R30 billion.

He signalled that government would not tolerate further corruption at its parastatals, saying a time when morality could be left behind with no consequence was over.

Before Gordhan spoke, members of Economic Freedom Fighters, led by leader Julius Malema staged a walkout when deputy Speaker Lechesa Tsenoli waved off his point of order.

Malema charged that Gordhan was a “constitutional delinquent” as a result of Public Protector Busisiwe Mkhwebane’s report which found his handling of the early retirement of former South African Revenue Service deputy commissioner Ivan Pillay amounted to maladministration, and directed that President Cyril Ramaphosa take disciplinary action against him. Gordhan has taken the report on review in the high court.

“I’m saying to you, you cannot show a middle finger to a chapter nine institution by allowing a constitutional delinquent to come and address us,” Malema said.

When Tsenoli told Malema he had no grounds to object to Gordhan speaking, the fiery leader replied: “Okay, honourable speaker, we will wait outside. When the constitutional delinquent is finished speaking, we will come back in.”

EFF MPs walked out of the National Assembly chamber, returning when the next speaker took to the podium.

African News Agency (ANA)

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