Ex-Denel CEO details how he was introduced to Guptas

The question of how the Guptas laid their hands on Denel has been hanging heavy at the Zondo Commission. First, ex-Denel CEO Riaz Saloojie testified he was made familiar with the Guptas through Zwelakhe Ntshepe who was the group executive for marketing at the time. Saloojie laid the blame of how the Guptas infiltrated the state arms company solely at the feet of Ntshepe. During his testimony, Saloojie said Ntshepe introduced him to the idea of working with the Guptas, then he attended meetings at Saxonwold with former minister of public enterprises Malusi Gigaba. ‘These are you friends’ Gigaba allegedly said and Saloojie was encouraged to work with the family as they had the support of ‘number one.’ Former president Jacob Zuma’s alias is number one, in reference to his top post in the government and ANC at the time – Bernice Maune. 

By Bernice Maune

Zwelakhe Ntshepe, the former CEO of Denel was adamant at the Zondo Commission that he had been told to work closely with the Guptas by his predecessor, Riaz Saloojie.

However, Saloojie said it was Ntshepe and then Minister of Public Enterprises Malusi Gigaba who encouraged him to co-operate with the Guptas on their company, VR Laser. Zuma’s son, Duduzane Zuma is also a part shareholder in VR Laser with Gupta lieutenant Salim Essa holding the majority of the shares at 75 percent.

When questioned how VR Laser had become a partner at Denel, when they were awarded a contract worth R195m in 2015, Ntshepe said he was told by Saloojie that the company had to work for the defence company. Though Saloojie disputed this in his own testimony earlier this year, Ntshepe vehemently denied introducing Saloojie.

Ntshepe said he was sold the idea of partnering with the Guptas by being told they would invest R100m in a joint venture in India. Under Denel Asia, Ntshepe would be the chairperson and undertake other partnerships with companies in that region.

“My duty was action orientated. I had no reason to believe VR Laser was not to be our partner…As time went on, I realised Essa is part of the Guptas. Saloojie said they must meet often so he could get into defence industry,” said Ntshepe.

Ntshepe claimed that after meeting Essa, Saloojie encouraged Essa to buy VR laser as it was owned by different shareholders. On how he was convinced partnering with the Guptas and Essa would make sense for Denel, financially and business-wise, Ntshepe said Saloojie and Essa explained VR Laser had a good product which would enable them to have a competitive advantage.

By making an entry into India and Asia, VR Laser would get Denel into that market by being a buffer for the market. Ntshepe explained that strategy would work because Denel had been banned in India for illegal practices which included approaching companies without that government’s approval.

When it came to the matter of VR Laser winning a  contract that was R100m more than LMT, Denel’s subsidiary, Ntshepe says it was supported because VR Laser promised it could deliver hulls for military vehicles.

At times, Ntshepe was shifty in providing clarity about his role on signing off on the contract awarded to VR Laser. Not wanting to take accountability as he was the CEO, he finally conceded that awarding VR Laser the bid was wrong.

The R100m investment promised by the Guptas never materialised. Instead, the wealthy family pocketed R195m and never delivered on the platform hulls required for the Hoefyster contract which the commission heard was 8 years late in meeting it’s delivery commitments.

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