By Michael Appel
State arms manufacturer Denel went from making hundreds of millions in profit a mere seven years ago to being technically insolvent today. Its electricity was recently disconnected by the City of Tshwane for being R2.4m in arrears. Once it was able to pay R300,000, the national key point’s power was reconnected. But the situation is clearly untenable.
According to union UASA, the SOE hasn’t been able to pay workers their full salaries for about two years and Denel owes R636m to staff and R900m to suppliers.
The SOE finds itself in an incredibly dire position. Zondo’s report even makes mention of the fact that it’s unclear whether Denel can be saved at this stage or whether its shareholder, the government, has the will or finances to breathe life back into this crippled entity.
[WATCH THE EXPLAINER VIDEO]
What helped push this state-owned entity to the brink of collapse was the 2015 capturing of its board by the Gupta enterprise, assisted to an extraordinary degree by former Public Enterprises minister Malusi Gigaba and his successor Lynne Brown. The Denel portion of the second tranche coming out of the State Capture Inquiry is hundreds of pages long but here is a summary I hope will provide some understanding of the Gupta’s destructive and nefarious modus operandi.
[LISTEN TO THE DENEL SUMMARY]
If you missed the Transnet summary it can be read, watched and listened to here.
Read also:
- Denel staff received just 20% of salaries in May – Daily Friend
- Denel cold shoulder as SAA, Eskom grab bailouts – SOE in ‘spiral of terminal decline’
- Welcome to the Gupta’s racketeering enterprise, collect bribes at the door
