Gordhan unveiled Hlahla alongside businessperson Zoli Kunene, University of Johannesburg Vice-Chancellor Tshilidzi Marwala, South African Military Ombudsman Themba Matanzima, businessperson Gloria Serobe, Basil Read chief financial officer, Talib Sadiq, political activist Sue Rabkin, Wits Business School head Sibusiso Sibisi, businessperson Cheryl Carolus, Growthpoint non-executive director Nonzukiso Siyotula, Thami Magazi and lawyer Martin Mnisi as the new board that would be tasked with restoring the entity’s credibility.
None of Denel’s former board members was retained.
Gordhan said the move was aimed at restoring good governance and free the cash-strapped defence and technology group from the clutches of state capture.
He said the new board would be tasked with reversing Denel’s involvement in state capture and to return the entity to its former days of financial stability. Gordhan said Denel’s finances had deteriorated significantly since 2016 when revenue was more than R8billion. “Denel now faces the real threat of collapse unless far-reaching decisions are taken urgently,” said Gordhan.
Denel is among a handful of state-owned enterprises (SOEs) that were caught up in allegations of state capture, which entails systematic looting of the entities. Former chairperson Daniel Mantsha, who has been heavily implicated in the allegations of corruption, resigned last month.
Gordhan said Denel currently owed its suppliers millions of rand. He said he met with some of the suppliers and trade unions yesterday. Many of the suppliers “had difficulty extracting money from Denel.” Denel has been experiencing serious liquidity problems. There were reports last year that it was struggling to pay its employees.
Gordhan said the interim board was subject to confirmation “at the next cabinet meeting.” He said the board had to review the effectiveness of the management team, reconsider major contracts and Denel’s financial position.
He said the appointments were in line with the directive by President Cyril Ramaphosa at the State of the Nation address for SOEs to strengthen governance, root out corruption and improve financial position. He said the financial model of SOEs had to be reviewed.