Cape Town - State arms maker Denel has hit back at Finance Minister Pravin Gordhan in an indignant statement after he warned of possible disciplinary action relating to its joint venture with a firm linked to the Gupta family.
Spokeswoman Vuyelwa Qinga said the principle of co-operative governance in the constitution required organs of state, including the Treasury and Denel, to “co-operate with one another in mutual trust and good faith”.
“That includes an expectation to always deal with matters of mutual interest internally, and underpinned by principles of co-operative governance and inter-governmental relations,” Qinga said, apparently rebuking Gordhan for issuing a public warning to the company.
This comes after the finance minister confirmed on Wednesday that the joint venture between Denel and VR Laser Asia to market the arms manufacturer’s products in Asia had not been given the green light by himself or Public Enterprises Minister Lynne Brown, as required in terms of the Public Finance Management Act (PFMA).
Gordhan warned that such a breach could result in disciplinary proceedings.
While Denel had submitted its applications for the Treasury’s approval in terms of two sections of the PFMA on December 10, it had been asked for further information, and approval had not been given.
This was the date on which President Jacob Zuma’s first pick to replace axed Nhlanhla Nene as finance minister, Des van Rooyen, arrived at the Treasury, with two Gupta family associates in tow.
Van Rooyen’s spokeswoman Tsakani Baloyi said on Thursday that the now minister of co-operative governance and traditional affairs knew nothing about the application and had never seen it.
VR Laser Asia is owned by Salim Essa, a business partner of the Gupta family, and questions have been raised over its capacity to assist Denel in penetrating the Asian market, given its limited experience in the defence industry.
Three Denel executives, chief executive officer Riaz Saloojee, chief financial officer Fikile Mhlontlo and company secretary Elizabeth Africa, were suspended shortly after the appointment last year of a new board by Brown, amid claims that their removal was to clear the way for the VR Laser joint venture.
Brown told Parliament’s public enterprises oversight committee last week the disciplinary process had been delayed because the three had asked for more time, but they have denied this.
Meanwhile, the SACP has called for an investigation into the deal, following a slew of revelations about attempts by the Gupta family to wield in-fluence over the government, including an offer to Deputy Finance Minister Mcebisi Jonas for him to take over from Nene, before Zuma had announced the cabinet reshuffle.
Former public enterprises minister Barbara Hogan also recounted recently how she had been pressured to meet the Gupta-linked Jet Airways before her removal from the post.
Asked whether Brown had ever been subjected to attempts by the Gupta family to influence her, and if so, whether she had reported these to the office of ANC secretary-general Gwede Mantashe, her spokesman Colin Cruywagen said the minister would not comment on internal ANC processes.
Political Bureau