Denel wins Gupta business rescue case

SA defence and technology company Denel produces armoured vehicles, among other things. File picture: Supplied

SA defence and technology company Denel produces armoured vehicles, among other things. File picture: Supplied

Published Jul 27, 2016

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Johannesburg - Denel on Wednesday said it felt vindicated from allegations of being co-opted by the Gupta family after the North Gauteng High Court in Pretoria dismissed an urgent business rescue application made by LMT Holdings against the state-owned defence conglomerate.

The application for business rescue brought by LMT Holdings, a Denel subsidiary, was dismissed with costs by the same court on Tuesday due to the applicants’ failure to make out a case supporting their application.

LMT is a local vehicle engineering and manufacturing company that is 51 percent-owned and supported by Denel.

In a statement, Denel said the applicants failed to put before the court and the respondents a replying affidavit that was compliant with court rules and instead filed unsigned and uncommissioned affidavits.

“The applicants did not even have a response to claims that their application was designed to create media hype and that they had leaked their highly inflammatory application to the media even before serving it to the court and Denel,” read Denel’s statement.

Denel acting chief executive, Zwelakhe Ntshepe, said they felt vindicated by the court in its dismissal of the application with costs including those of the two counsels.

“They further had no response to our contention that the application was designed to create media hype and to exploit the media generated hype of alleged ‘state capture’ of the company by the Gupta’s which up to now has not been supported by even a shred of evidence,” Ntshepe said.

“We are now focusing on operational matters aimed at ensuring that LMT delivers to its valued customers as promised.”

The shareholders of LMT Holdings had filed an urgent application to the court earlier this month to challenge the awarding of the R1 billion contract for the Hoefyster programme to another company, VR Laser, which is affiliated to the Gupta family and President Jacob Zuma’s son Duduzane.

LMT Holdings had argued that, according to the contract, Denel was supposed to award it the design and manufacturing contracts for the Hoefyster project, which would generate an estimated income of approximately R100-million a year for a period of 10 years.

LMT then argued that there had been political motive and meddling to ensure that Denel awarded the remaining Hoefyster contracts, previously promised to the LMT Holdings, to VR Laser.

LMT then said it was struggling to pay salaries for its 250 employees and suppliers, and asked the court to rule in favour of the appointment of a business rescue on an urgent basis, which Denel opposed.

Denel opposed the application and from the onset rejected the allegations that it was the cause of the alleged challenges LMT was faced with.

On Wednesday, Denel said LMT Holdings remained a valued strategic asset to the group notwithstanding this recent battle.

African News Agency

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