JOHANNESBURG - In a new wave of allegations against Denel, trade union Solidarity says the state-owned aerospace and defence technology group’s top management received up to 60percent salary increases last year at a time when it struggled to pay staff salaries.
Yesterday Solidarity released a document with details of alleged mismanagement at Denel.
Efforts to get comment from Denel were not successful.
Solidarity chief executive Dirk Hermann said it had taken the union more than a year to compile the document, which he said was based on, among others, interviews with several Denel employees “including people in senior management”.
In the report, Solidarity said Denel’s top management, including the chief executive, Zwelakhe Ntshepe, and the chief financial officer, Odwa Mhlwana, should be suspended pending a forensic investigation. “We show that there is a prima facie case for a proper forensic investigation.
"It is not our responsibility to do the investigation,” said Hermann.
He said the alleged financial mismanagement, circumvention of tender procedures and contempt for internal policy should be investigated, because the entity had been having financial difficulties and had had to be bailed out by the government.
Solidarity said it had sent numerous documents to former public enterprises Minister Lynne Brown and later to current Public Enterprises Minister Pravin Gordhan regarding its concern about the financial mismanagement at Denel.
“Solidarity has further expressed concern that approximately 700 job opportunities may be jeopardised as a result of the financial problems at the company,” the union said.
Hermann said the union would hand the document to Gordhan “with the view of further action”.
Willie Venter, Solidarity’s sector co-ordinator for the defence and aviation sectors, said yesterday that the allegations in the document were sufficient to warrant the suspension of Ntshepe and Mhlwana.
Venter said the salary increases for top management came after Ntshepe and Mhlwana had approached the Denel board in February 2017 “at the height of Denel’s liquidity crisis” with adjustments.
Salary increases
These were done after a benchmarking exercise “to see if the Denel executives were in line with the other (state-owned companies') salaries.”
He said the adjustment had resulted in salary increases of R4.5million a year for executive committee members. “Was it ethical for Denel executives to motivate for such an adjustment at a time when Denel had a liquidity crisis?” he asked.
The union maintained that Denel’s decision to award a R1m bursary to North West premier Supra Mahumapelo’s son was in contravention of its policy.
“The bursary was awarded outside of Denel policy guidelines, even if (it was) approved by the board. Does the board have the authority and capacity to override Denel policy? We believe that they do not. No board can override operational policies and guidelines in any company,” said Venter.
On Monday Denel denied that Ntshepe had awarded the bursary to Mahumapelo in contravention of Denel’s policy.
“The award was made in compliance with Denel’s relevant policy after a full disclosure and presentation to the board of directors of Denel which was noted without any objection,” said Denel.