Zuma allegedly discussed sale of share in Denel to Qatar | Fin24
 
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Zuma allegedly discussed sale of share in Denel to Qatar

Nov 26 2017 14:05

Cape Town - The government of Qatar has discussed the possibility of investing in South African state-owned arms manufacturer Denel, the Sunday Times reported on Sunday.

According to the Sunday paper, this allegation was made in the media in Qatar.

The Sunday paper claims it has been informed by a reliable source that Qatar is negotiating with President Jacob Zuma about possibly buying a majority share in Denel.

A delegation from Qatar undertook a state visit to SA earlier this year.

According to the Sunday Times, Denel has denied these allegations. The paper claims Denel has to repay R1bn, but does not have the funds to do so.

Fin24 reported in October the office of the auditor general told members of the portfolio committee on public enterprises that it had requested auditing firm SizweNtsalubaGobodo (SNG) to change its clean audit opinion on Denel after irregular expenditure had come to light.

Denel, in turn, claimed there was nothing wrong with its audit, as it did include details of irregular expenditure as the office of the auditor general has asked for.

These include 106 cases where deviations from the procurement process not adequately approved, 8 cases where bids were not adequately approved, and 7 cases where contract extensions were not adequately approved.  

Towards the end of October this year Zwelakhe Ntshepe was appointed as the new group CEO of Denel and Odwa Mhlwana is the new group chief financial officer.

In August Finance Minister Malusi Gigaba welcomed Denel’s decision to end its joint venture with Gupta-linked VR Laser. In his view, it sent a message of the commitment by state-owned enterprises to good governance.

Fin24 has approached the Presidency for comment on the Denel/Qatar allegations, but at the time of publication none had been received yet.

UPDATE: Bloomberg reported on Sunday that the Department of Public Enterprises, which would need to approve the transaction, did not immediately respond to Bloomberg’s requests for comment.

According to Bloomberg, Denel was among state entities bailed out this year to prevent a call on its government-guaranteed debt. This list includes South African Airways, the South African Post Office and the South African Broadcasting Corp. which all may require further intervention, the National Treasury said in its mid-term budget report.

A spokesperson for the president denied the report. “There was no discussion of the issues” during the minister’s “courtesy call,” Bongani Ngqulunga, a spokesman for the president said in a text message to Bloomberg.

According to Bloomberg, Mayihlome Tshwete, a spokesperson for National Treasury, says it isn’t aware of any such discussions. He said the treasury has spoken to the Department of Public Enterprises about the matter and the department denies the talks.

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denel  |  jacob zuma  |  industrial
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