Transnet, Denel in bold house-cleaning move
JOHANNESBURG – Embattled state-owned entities Denel and Transnet on Wednesday moved to clean house after years of mismanagement and corruption.
The arms manufacturer said it was taking “bold steps” to revive the company plagued by lapses in governance as the group reported an operating loss of R1.7 billion in the 2017/18 financial year.
In the meantime, Transnet, the rail freight logistics giant, put its group general manager for finance, Edward Thomas, on suspension over his links with the Gupta family in his previous role as group supply chain officer.
Transnet board chairperson Popo Molefe said Thomas had been suspended pending investigations into various allegations of misconduct involving a number of contracts.
“Transnet is currently conducting investigations into allegations of impropriety concerning the role played by some advisers and consultants, including Regiments Capital, Trillian Advisory Services, Trillian Capital Partners and Nkonki, in which Thomas is alleged to have played a role,” Molefe said.
The Molefe board has wasted no time in moving against those accused of corruption at the logistics group. This month the board fired chief executive Siyabonga Gama, while chief procurement officer Thamsanqa Jiyane and supply chain manager Lindiwe Mdletshe are on suspension.
The group’s treasurer, Phetolo Ramosebudi, resigned this week after being informed of his suspension.
Denel said it was working with the Department of Public Enterprises and the National Treasury to ensure that the turnaround plan will help the group out of its current liquidity challenges.
“While the medium to long-term position of Denel is confirmed by its role as a national strategic asset, and underpinned by a sound order-book and proven world-class capabilities, the short-term outlook is under pressure due to the severe cash constraints,” Denel said.
The government this week extended Denel’s guarantee to R3.43bn over a five-year period ending in September 2023.