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Denel auction raised paltry R700k, pressure mounts on state to intervene

Photo, Supplied, Denel.

Photo, Supplied, Denel.

Published Jul 18, 2022

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State arms manufacturer, Denel's troubles are far from over as the first auction of its assets raised a paltry R700 000 tops against R90 million in salary areas with pressure mounting from trade unions, including the National Union of Metal Workers of South Africa (NUMSA) which entered the fray with a memorandum of demands to government.

Assets that went under the hammer on Friday were thirteen vehicles, including seven pick-up trucks, along with three forklifts, a plasma TV, leather chairs, couches as well as office chairs and desks.

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Helgard Cronjé, deputy general secretary for the public sector at Solidarity said the amount raised would be even less after taking out auctioneer's fees.

"I am not sure what we will do next, maybe further auctions. We are expecting that there will be that money from the medical aid fund that we expect will go to the claims of our members, we don't know when that will happen but it should be soon so there are no further auctions," Cronjé said.

Solidarity, on behalf of whose members the R90 million outstanding claim is being executed for, is also in possession, by court order of Denel's Corporate’s bank account after the state entity failed to honour agreements and court orders.

Denel's total labour bill from 2020 is reportedly closer to R700 million and concermns have been raised as well about the SOEs tax bill usurping authority over any available funds.

Earlier this year, Department of Public Enterprises Minister announced to Parliament that Denel was due for an about R1 billion endowment from its medical aid fund after a High Court decision allowed it access provided the welfare and wellbeing of those members that are still left in the medical aid trust are provided.

In a list of 13 demands, NUMSA with membership at Denel Pretoria Metal Pressings on Friday marched on the DPE and called for the department to drive an agenda to re-capitalize Denel with clear timelines for when the funding will be made available.

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"Denel is restructuring and already it seems that there are plans to cut jobs. We reject any job cuts at Denel. We reject down varying and education in salaries and benefits. We are already facing an extremely high rate of unemployment in this country. We are advocating for the best alternative in line with the Stakeholders Social Plan. We strongly believe that the State must intervene as this is the most strategic state owned institution. There can be no retrenchment or restructuring that should affect workers while Denel DCO and Divisions still owe employees their salaries and benefits," Numsa said.

It also demanded that all outstanding salaries for the months April, May and June must be paid in full.

"We demand a written guarantee that going forward all salaries will be paid in full and on time from July going forward. Employees have not received an increase for the past three (3) years. We have suffered and carried this company on our backs with no help, and no support from the government the shareholder, or the organization. We deserve an increase!," the memorandum read in part.

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Numsa said Denel needs R5 billion in order to be viable, that In 2018/9 it had an order book of between R20 billion and R30 billion.

"As we speak there are potentially billions worth of contracts that can be serviced, but Denel is unable to deliver on these orders because it has no operating capital. Denel PMP is the main supplier of ammunition and other products to SAPS, SANDF, METRO POLICE, SAA and SASOL amongst others. It is currently being mismanaged and this will affect the safety and security of the country,' the union said.

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