'Denel is not captured by anyone' - board chair

Cape Town – Denel is fighting a battle of perceptions created by fake news, its board chairperson Daniel Mantsha said on Wednesday.

Responding to questions from MPs who serve on the portfolio committee on public enterprises, Mantsha said he realises a perception has been created that Denel is captured because of its relationship with VR Laser. 

VR Laser has links with the Gupta family and President Jacob Zuma’s son Duduzane. VR Laser Asia - the company with which Denel wants to enter into a joint venture - on the other hand is linked to the Gupta family’s business associate Salim Essa. He is the sole shareholder of VR Laser Asia, as well as a director of VR Laser SA. 

Mantsha and the state-owned arms manufacturer’s acting CEO Odwa Mhlwana were grilled by MPs about Denel’s suspension of three top officials and its intended joint venture with VR Laser Asia. 

READ: Gordhan leads the charge against Denel on Gupta links 

MPs said they were concerned about the dealings South Africa’s state-owned entities (SOEs) such as Denel have with companies linked to the Gupta family. 

'Prove you're not captured' 

Democratic Alliance spokesperson on public enterprises Natasha Michael said state capture is a “frightening thing”. 

“I don’t want my government doing business with the Gupta family and I don’t like hearing our SOEs are doing business with either the Guptas or (a) Gupta-linked family.” 

She told Denel it is responsible for proving it is not “captured”. 

“Have you had direct or indirect dealings with the Gupta family?” 

In its responses, Denel said the Guptas acquired a stake in VR Laser around 2013 or 2014. In November that year, Denel signed a contract with VR Laser for 238 Badger vehicles. 

READ: Gupta-linked VR Laser eyes R2bn from Denel 

“At the time, neither the current board nor the acting CFO were at the company,” Mantsha said. 

He added that Denel’s expenditure on procurement processes amounted to close to R3bn. “Out of the R3bn, R255m was spent on black companies, including VR Laser. Just zooming into procurement processes with VR Laser and SAA – has it captured Denel? Surely the figures must then report it is getting the lion’s share from Denel. But that is not the case."

He said there is nothing “underhanded” about business deals with VR Laser or VR Laser Asia.
 
“There is fiction and then there are facts. Perceptions are based on fiction. Denel is not captured by anyone. We accept the invite to show to you we’re not captured. We have demonstrated we take the challenge seriously,” Mantsha said. 

Meeting with Gigaba 

The board chairperson said the meeting between himself and Finance Minister Malusi Gigaba on the sidelines of the World Economic Forum on Africa in Durban was to address Gigaba’s concerns about the impasse between National Treasury and Denel over the joint venture with VR Laser Asia. 

“The minister wanted to understand how the impasse can be resolved. The meeting was to explain to the minister where the noise was coming from, and the minister said he’ll meet with Minister (Lynne) Brown (of Public Enterprises) to formally discuss the matter.” 

READ: Gigaba halts Denel's deal with Gupta-linked firm 

Mantsha did not want to elaborate on whether Gigaba told him to deregister Denel Asia and dissolve the joint venture with VR Laser Asia, as reported by the Sunday Times earlier. 

“We can confirm the meeting took place, but the contents remain with the minister and us,” Mantsha said. 

Gigaba said at a media briefing on Tuesday following his budget vote speech in Parliament that he is yet to meet with Brown. He did however express concern over the fact that Denel approached the high court in Pretoria in a bid to compel Treasury and the minister of finance to approve the joint venture.

“Organs of state can’t take each other to court,” he said.