Denel is not captured by the Gupta family, acting chairman Daniel Mantsha insisted in Parliament on Wednesday. His "No, No, No" denial followed probing questions by former finance minister Pravin Gordhan and members of the portfolio committee on public enterprises.
This came after a briefing by Mantsha and Denel acting chief financial officer Odwa Mhlwana.
Mantsha said one only had to look at Denel’s R5bn annual procurement spend to see that it was not directed at Gupta-owned companies. An amount of only R235m of it was spent on black-owned companies, including the Gupta-linked VR Laser.
"VR Laser is not getting the lion’s share of Denel procurement spend," said Mantsha. He said it was very difficult to win the battle of perceptions which are not based on fact and are fed by fake news. While there could be a similar pattern to the capture of state-owned enterprises as outlined by Gordhan, Denel was different, Mantsha stressed.
Gordhan had challenged the Denel representatives to reply to the accusation that the entity was captured by the Guptas. He referred to a due diligence report by professional services firm ENS Africa on the establishment of a joint venture, Denel Asia, between Denel with Gupta-linked company VR Laser.
ENS Africa advised Gordhan when he was still finance minister that great care needed to be taken with regard to the joint venture because of the risks involved. These related to the proximity of the company to "politically exposed persons" and the company’s solvency, as VR Laser was experiencing financial difficulties.
Gordhan described a recurring pattern of the state capture process which he said was repeated at Denel. The relevant minister gets rid of the board and a new board comes in, which excuses misconduct and corruption, Gordhan said. Executives are removed and replaced by compliant ones.
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