The MPs said that Denel requires financial assistance from the government for its recovery. Picture: Siphiwe Sibeko/Reuters
The MPs said that Denel requires financial assistance from the government for its recovery. Picture: Siphiwe Sibeko/Reuters

Union wins court order to attach Denel assets over unpaid salaries

By Mwangi Githahu Time of article published Sep 21, 2021

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Cape Town - State-owned weapons manufacturer Denel is in dire straits after the Labour Court ordered that assets worth R4 million be attached by the Sheriff and sold with the money raised going to pay outstanding salaries and employee benefits, including medical aid and pensions.

The case was brought by the Solidarity trade union, which has another Labour Court hearing on the roll set down for October 7. That hearing also involves outstanding and short paid salaries.

Specialist in Defence and Aerospace at Solidarity Derek Mans said: “This victory is an example of Solidarity’s hard and dedicated work that gives a state institution a beating over the fact that they want to plunder their own employees’ salaries to fund their own corruption.

“Eskom’s load shedding has now become Denel’s salary shedding. We want to make corrupt state institutions and cadres pay for their crimes to ensure that taxpayers’ money is not wasted,” said Mans.

The court ruling comes in the wake of a joint meeting of Parliament’s portfolio committee on public enterprises and the select committee on public enterprises and communications at which Denel’s interim chief executive William Hlakoane said that the year-to-date balance sheet shows that Denel is technically insolvent.

“The latest cash flow projections for the 2021/22 financial year indicate that Denel’s balance sheet will be R600 million in the red if no mitigating action is taken,” said Hlakoane.

He said available cash is insufficient to meet operational requirements, including the payment of salaries and suppliers and that Denel currently owes R636 million to employees and related costs and approximately R900 million to suppliers.

Responding to Denel’s presentation, the members of the committees suggested that a meeting should be held with the departments of police and defence, to hear the reasons why they are not procuring their supplies from Denel.

The MPs said that Denel requires financial assistance from the government for its recovery, as it is the government’s legal responsibility to cover its liability as the shareholder.

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