Denel chairman Daniel Mantsha fed sensitive and classified company information to the Gupta family and forwarded the family some of his personal bills, leaked e-mails show.
The information related to a joint venture between Denel Asia — a subsidiary established by Denel — and Hong Kong registered company VR Laser Asia.
VR Laser Asia is owned by Gupta associate Salim Essa.
The venture was never approved by the Treasury and is now the subject of a court application by Denel, which wants the court to force the Treasury to give it the go-ahead.
The e-mail trail shows that Mantsha’s contact with the Guptas began soon after his appointment to the Denel board on July 24 2014.
On November 23 2015, Mantsha received an e-mail from Keromamang Mhlongo in the Department of Public Enterprises, whose minister Lynne Brown has political oversight over Denel.
Titled "PFMA Section 54(2) Pre-Notification on the Proposed Formation of Denel Asia", the e-mail was Brown’s response to Denel notifying her of its intention to form the proposed company.
The e-mail is marked "confidential" and advises Denel on how to go about setting up the joint venture.
Five days later, on November 28 2015, Mantsha forwarded the e-mail from his law firm’s address to Ashu Chawla of Sahara, a Gupta-owned entity.
In her letter, Brown concurs with Denel’s suggestion that the Pacific Asia defence market "will remain on an upward trajectory for the foreseeable future".
She, however, warns that the Asian market is likely to be "daunting" for the new entrant (Denel Asia).
The minister goes on to instruct the Denel board to protect the company’s status as the holding company.
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Brown says the application to the finance minister should include, among other things, a comprehensive business case
to enable the minister to express an opinion on the joint-
venture transaction.
She asks for a comprehensive due diligence report on the financial and legal requirements and regulatory laws governing foreign entities in Hong Kong.
Brown also asks for the processes followed by Denel to select VR Laser as a partner, as well as the proposed structure of the new entity and a breakdown of estimated operational costs, with a five-year budget indicating clear cost allocations for both parties.
Mantsha submitted the application for approval to the Treasury on the day after Des van Rooyen was appointed minister of finance. Van Rooyen was removed days later and never deliberated on the request.
His replacement as finance minister, Pravin Gordhan, refused to ratify the joint venture, questioning its rationale.
VR Laser Asia was a newly established company without any assets or intellectual property or anything else substantial to offer Denel.
After more than a year of resistance from the Treasury, Denel approached the High Court in Pretoria to compel it to agree to the venture.
In an opposing affidavit in May 2017, the Treasury director-general at the time, Lungisa Fuzile, said VR Laser SA did not appear to be in a position to finance its contribution to the joint venture.
The company was technically insolvent, he said.
"VR Laser SA runs its business operations and capital commitments through loan-financing raised from its shareholders. The shareholders have been identified as politically exposed persons," Fuzile said.
Current Finance Minister Malusi Gigaba met in May with Mantsha to persuade him to withdraw his application. Mantsha refused.
Apart from discussions over the joint venture, documents also show that Mantsha appealed to the Gupta family to settle his personal bills.
On August 3 2015, Mantsha sent his municipal rates bill
of R14,238 for his Randburg home, dated June 11 2015, to Chawla, saying: "Please find the attached document for your urgent attention."
It is unknown whether this amount was paid.
Other correspondence shows that Mantsha flew first class from Dubai to Johannesburg on October 6 2015. The ticket was sent by a travel agent to Chawla, with a subject line "Rajesh/Mantsha".
Mantsha failed to respond to numerous calls to his cellphone or to WhatsApp messages.
Brown’s spokesman, Colin Cruywagen, said last night: "I don’t think it is wise at this point to comment on e-mails of uncertain origin."
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