Former public enterprises minister Lynne Brown’s overhaul of the Denel board in 2015 was swiftly followed by the exit of the group chief executive officer credited for turning around the fortunes of the state-owned enterprise.
The Commission of Inquiry into State Capture heard yesterday that CEO Riaz Saloojee’s axing followed a mere six weeks later, in testimony by former board chairperson Martie Janse van Rensburg.
Janse van Rensburg said this was despite an appeal by her outgoing leadership to keep Saloojee, in order to ensure continuity in business strategy implementation.
Ironically, in her 2015 budget speech in parliament, Brown praised and credited Saloojee for Denel’s surging profits and its R35 billion order book.
After a hint that Brown planned to axe the entire board – only leaving behind Gupta business associate Johannes “Sparks” Motseki, who held 1.3% shares in the family-owned Shivas Uranium, Janse van Rensburg’s outgoing board wrote a letter to the former minister, appealing to her to retain some key brains on the board for continuity.
“We expressed concern that there would be no continuity if we all left, putting Denel at risk – with the 90% wholesale change leading to instability,” said Janse van Rensburg.
“This was also not in compliance with good corporate governance, fiduciary duty, the King III Report and government guidelines on state-owned enterprises board composition guidelines.”
Asked by commission senior counsel Zinhle Buthelezi to reflect on Motseki’s capabilities – the lone survivor of the Brown 2015 board bloodbath – she said: “I served with Mr Motseki on the board for four years. His skills lay in policy development and media. He did not serve in any board subcommittee, as was the case with other members.
“In practice, you allocate experience, skills and qualifications to a certain board subcommittee. It has to be skills-based.”
She said her board also recommended an extension of Saloojee’s CEO contract, which was set to expire in 2017.
“Mr Saloojee was key in rolling out the agreed strategy and enabling the newly appointed board to effectively fulfil its oversight responsibility,” she said.
“We also realised that the recruitment of a CEO takes up to 12 months.”