‘If this was about a bailout, they would be here’: Denel board snubs Scopa

The financially embattled Denel pulled a no-show on Tuesday at a meeting with parliament’s Standing Committee of Public Accounts (Scopa).

The state-owned enterprise (SOE) was scheduled to appear before Scopa on Tuesday to explain why it did not table its annual report, and to provide an update on its liquidity crisis.

The committee was also expected to receive an update on the investigations conducted by the Special Investigating Unit (SIU) at Denel.

But the meeting was adjourned after Denel’s board snubbed Scopa, leaving members of the committee frustrated.

Delays accountability

At the beginning of Tuesday’s meeting, Scopa chairperson Mkhuleko Hlengwa indicated that he was notified that Denel board chairperson Gloria Serobe was abroad.

However, he was informed that there would be other board members available, although Denel Group interim CEO Mike Kgobe was present at the meeting.

Hlengwa said the Denel board’s no-show was disrespectful and unacceptable.

“The accounting authority of Denel is the board, not the executives,” he said, adding that the meeting cannot proceed without the board.

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Democratic Alliance (DA) MP Alf Lees agreed with Hlengwa and suggested that the board be recalled to appear before the committee.

“If we don’t proceed, it is wasteful expenditure on many parts, but also delays accountability and oversight.”

Another DA MP Benedicta van Minnen also expressed her frustration with Denel, pointing out that Denel has received a total of R9 billion in bailouts over five years.

“There are 9 billion reasons the board should be here today and I cannot find any reason whatsoever why they are not here. I think it is appalling that the accounting authority with a record like that has got better things to do. I think it is very problematic,” said Van Minnen.

Watch the meeting below:

‘Denel is a mess’

Economic Freedom Fighters (EFF) Constance Mkhonto said she believed the board’s failure to show up could be a reflection of Denel’s current state.

“There is a board on paper, but physically there is no board. You look at the reports, you look at the behaviour of the board, it means there is no board at Denel.”

READ MORE: Corruption has brought Denel to ‘its knees’

Hlengwa postponed the meeting to Wednesday next week, saying the board would be subpoenaed if it did not pitch.

“This is the last instance of us tolerating this because we have not had a favourable relationship with the chairperson of the board when they appeared here before. It has not been pleasant and this then goes to underscore exactly that. Denel is a mess, it’s a shadow of its former self.

“I can assure you that if this meeting was about a bailout, they would have been here. This does not only waster parliament’s time and resources, the SIU is here,” said the Scopa chair said.

Denel restructuring

Denel is currently under a restructuring process carried out by the Department of Public Enterprises amid allegations of malfeasance against Public Enterprises Minister Pravin Gordhan, City Press has reported.

Denel was granted a R3.2 billion bailout by the National Treasury in February to help turn around the state arms manufacturer within the next two years.

Denel is also reportedly being sued for R112 million by Armscor over contract failure.

The company was awarded a contract, worth R8 billion by Armscor for the full-scale production of new-generation 8×8 Badger infantry combat vehicles in 2013.

The tender is at risk of being cancelled and could cost taxpayers R7.4 billion.

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