Asia-Pacific was important for Denel’s products despite Finance Minister Malusi Gigaba’s insistence that it dissolve Denel Asia, the state-owned arms manufacturer said in a statement issued on Tuesday.
Denel Asia is a joint venture between Denel and VR Laser Asia, owned by Gupta family associate Salim Essa.
During former finance minister Pravin Gordhan’s tenure at the Treasury, Denel had filed a high court application in a bid to have the joint venture approved. At the time of the application in March, Denel CE Zwelakhe Ntshepe said the parastatal had on "numerous attempts" tried to work with the Treasury to explain the legal processes that the company had followed in establishing the Denel Asia joint venture, but that the matter remained unresolved.
Tuesday’s statement in response to queries made two weeks ago, said: "Denel still maintains that the Asia-Pacific region is an extremely important region for Denel to expand its business and find new markets for our world-class products, especially … artillery, armoured vehicles, unmanned aerial vehicles and missiles."
The company had submitted a formal application for approval for Denel Asia under the Public Finance Management Act in December 2015.
When it did not get a response within 30 days, it went ahead and registered the joint venture company in Hong Kong in January 2016. This resulted in a standoff between the board of Denel and Gordhan.
Public Enterprises Minister Lynne Brown had approved Denel Asia but told the company it was not allowed to trade until the approval of the Treasury was obtained.
Gordhan was removed during a late-night Cabinet reshuffle which sent the economy into a tailspin and saw led to SA being downgraded to junk status by two ratings agencies.He and was replaced by Gigaba, whom opposition parties and some civil society organisations alleged was placed in the finance ministry to act as proxy for the politically connected Gupta family.
The Sunday Times reported earlier in May that Gigaba had met with Denel chairman Daniel Mantsha in Durban and had expressed concern about the financial implications of the Denel Asia deal.
The minister also reportedly demanded that Denel withdraw its court application.
Denel confirmed the meeting on Tuesday but not the rest of the Sunday Times report. It said it would engage the Treasury to ensure that "misunderstandings" were resolved.
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