CAPE TOWN - Public Enterprises Minister Lynne Brown has laid out the full details of state arm’s manufacturer, Denel’s vulnerable financial state.
This was allegedly revealed in Brown’s written response to a parliamentary question. In her response, the minister also indirectly confirmed testimony by a whistle-blower in the Eskom inquiry who testified that Denel utilised the services of contentious financial advisory firms Regiments Capital and Trillian to raise money.
However, in December, the state arms manufacturer confirmed that it was cash strapped and thus unable to pay employees their self-funded bonuses.
This followed prior queries with the arms dealer in October when the auditor general (A-G) accused Denel of allegedly tabling a flawed audit report.
Furthermore, auditing firm, SizweNtsalubaGobodo (SNG), had the quality of its work questioned after it initially gave Denel a clean audit, despite lack of supporting evidence.
The company owed its suppliers R668 million, Brown confirmed in her response.
In November, Denel had R266 milion of debt coming due in 30 days.
The arms deal magnate lagged further behind in R151 million of debt, owing for 120 days.
In a separate written reply to a question posed by the Democratic Alliance (DA), Brown confirmed that Denel’s former CEO, Riaz Saloojee authorised the appointment of Gupta-linked Regiments Capital in 2012 to raise R290 million for the arms manufacturer.
In 2013, Denel’s acting CEO Zwelakhe Ntshepe allegedly authorised another contract with Regiments through which R400 million was raised.
This confirms testimony by former Regiments and Trillian employee Mosile Mothepu at a parliamentary inquiry, that Denel was among the parastatals that offered profitable deals to the advisory firms.
In addition, state owned enterprise, Eskom, was also implicated in dodgy deals with advisory firm, Trillian.
A whistleblower in November told the parliamentary inquiry into Eskom that the power utility allegedly settled a fraudulent invoice from Trillian for R30.6 million. Former Trillian Management Consulting (TMC) chief executive Bianca Goodson’s signature was found on a cover letter to the invoice that was sent to Anoj Singh, Eskom's chief financial officer.
Goodson said that she did not write the cover letter, nor compile the invoice and maintained that there was no reason to pay TMC.
"I did not do that work and my CFO did not do that work. We did no billable work. We were establishing the company," she told Parliament's portfolio committee on public enterprises, which is the conducting the inquiry.
Goodson then quit Trillian in 2016, joined multinational software enterprise Sage and later joined Asset Management Company, Synia in November 2017.
- BUSINESS REPORT ONLINE