Gordhan lashes out at Denel as it begs for R3bn lifeline
State arms manufacturer Denel on Tuesday pleaded for an equity injection as it briefed MPs on its results for the past year, but former finance minister Pravin Gordhan flatly countered that the company's dire financials were linked to its dealings with the Gupta family believed to have corrupted key parastatals.
Gordhan said these allegations had dented business confidence around Denel, and cash alone could not fix the problem.
"The story of state capture has impacted on confidence," Gordhan said as members of Parliament's portfolio committee on public enterprises responded to the financial report.
"A new board needs to be appointed with no emails linked to them, or visits to Dubai. Otherwise we keep asking the CFO and the CEO to do the impossible," he said, adding that in the current financial climate it was hard to see where the funds for a bailout would be found.
Earlier Gordhan remarked that the defiance shown towards him in his capacity as finance minister by Denel chairperson Daniel Mantsha around a partnership with close Gupta associate Salim Essa had been unprecedented.
"Mr Mantsha was very vocal in 2016-17, precisely at the time when the Gupta emails indicated he had a close relationship with the Guptas, particularly at the time when Denel Asia was at play," he said.
Gordhan was referring to a joint venture Denel sought to pursue with Denel-Asia, fronted by Essa, in the absence of approval from National Treasury, which eventually shut down the deal.
"No CEO has ever challenged a sitting minister as he did, and that was as a result of his relationship with the Gupta family, which impacts on his credibility."
Documents submitted to the committee by Denel said it needed a R3-billion capital injection.
Chief financial officer Odwa Mhlwana said the company's cash flow crisis was due in part to lenders cancelling agreements, forcing it to repay R756-million "in the last few months" that had been designed as five-year loans.
It severely hampered its ability to pay suppliers, who were now demanding cash transfers before delivery, he added.
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation