JOHANNESBURG, July 12 (ANA) - Cash-strapped state arms manufacturer Denel is far from recovering from a liquidity crisis and could plunge employees' future into serious financial difficulties, trade union Solidarity said.

Following late salary payments in June, employees received letters stating that pension contributions were deducted from salaries but not paid over to the pension fund.

"There is still some uncertainty about exactly what has been paid and whatnot. According to a letter to employees, pension fund contributions for the month of June were deducted from their salaries, but the contributions were not paid over to the pension fund," said Helgard Cronjé, Solidarity's sector coordinator for defence and aerospace.

"Feedback we received indicated that medical aid contributions were paid, but not PAYE tax, UIF contributions or pension fund contributions for June." 

The union has launched legal action against the state-owned company over alleged financial mismanagement, corruption and its inability to pay worker salaries. Solidarity said it served a demand under section 165 of the Companies Act on Denel in June to take legal action against individuals responsible for the financial predicament the company finds itself in.  

This came after various irregularities were documented through Solidarity’s "Denel File"  and handed to the company in April 2018. Cronjé said the dossier led to several dismissals at the institution.

A meeting with the Denel pension fund administrator has been scheduled for next week.

Said Cronjé: "On Monday, Denel will meet with the employees’ pension fund, Denret. Trade unions have already scheduled a follow-up meeting with Denel to ensure actual liability. We will not hesitate to take the necessary action to protect the interests of our members."

African News Agency (ANA)