Solidarity said it served urgent court documents to force Denel to pay the unemployment insurance levy and taxes deducted from employees’ salaries. File picture: Reuters/Siphiwe Sibeko

JOHANNESBURG  - Labour union Solidarity said on Wednesday it had served urgent court documents to force struggling state-owned arms maker Denel to pay the unemployment insurance levy and taxes deducted from employees’ salaries. 

Solidarity also launched a process in terms of the Companies Act to investigate former Denel board members for mismanagement and corruption with a view to possible prosecution.

The move follows cash-strapped Denel's announcement that it could only pay a certain portion of its employees’ salaries for June and July.

"The victims of reckless mismanagement and state capture are real people with families and emotions," Solidarity chief executive Dirk Hermann said in a statement.

"Employees’ salaries are used to subsidise cash flow. However, Denel went even further and withheld compulsory income tax payments to the South African Revenue Service, even though these payments were indicated on the employees’ pay slips."

Solidarity said it had become general practice that South African taxpayers and employees of state enterprises are being treated as financiers for state capture.

The union said a dossier it released in April made it clear that mismanagement and possible corruption by former Denel executives led to the arms giant’s financial woes. 

“Those responsible for Denel’s financial crisis are not being held accountable and they are getting off scot-free, while our members, innocent employees, have to bear the consequences. The recent non-payment of salaries can be traced directly to the effect of state capture,” Solidarity deputy general secretary Johan Botha said.

- African News Agency (ANA)