Former Denel CEO Riaz Saloojee testifying at the State Capture inquiry in Parktown. Picture: Simphiwe Mbokazi/African News Agency(ANA)
Former Denel CEO Riaz Saloojee testifying at the State Capture inquiry in Parktown. Picture: Simphiwe Mbokazi/African News Agency(ANA)

Ex-Denel CEO was axed for refusing to 'cooperate' with Guptas, Zondo hears

By Zintle Mahlati Time of article published Mar 20, 2019

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Johannesburg - The former CEO of Denel Riaz Saloojee has told the Zondo commission that he was fired over his refusal to cooperate with the Guptas and their desire to capture Denel. 

Saloojee has told the commission on Wednesday about the months preceding his firing in April 2016. 

Former public enterprises minister Lynne Brown appointed a new board for arms manufacturer Denel in July 2015, she kept just one member of the old board. 
The complete overhaul of the old board, which had done well, was a shock to many. 

Saloojee said quickly after the new board took over, its risk committee had started raising questions about an LSS deal that was signed and approved by the previous board. He said the deal was above board and followed proper processes. 

He said while he was at a defence fair in London in September 2015 he was told by the board chairperson Daniel Mantsha that the risk committee was still concerned about the LSS deal. 

When they returned, Saloojee said he along with company secretary Elizabeth Africa and chief financial officer Fikile Mlhontlo were asked to give reasons within 24 hours why they should not be suspended in relation to the LSS deal. 

Saloojee said the process was rushed and at the end, the three were given an option of being paid three months salary if they resign. Saloojee said they declined the offer. 

The board immediately placed them on suspension. 

Saloojee said he believes that the above sequence of events was prompted by his refusals to entertain business invitations from the Guptas. 

He told the commission how Gupta proxy Salim Essa had started brokering for the Guptas in 2012 with regards to Denel. 

He was invited several times to visit the Gupta household in Saxonwold by Essa. 

The first meeting happened in 2012 and he was introduced to former public enterprises minister Malusi Gigaba by Atul and Tony Gupta. 

In the second meeting, he met Duduzane Zuma. In the third meeting, Tony Gupta told him that they were interested in doing business with Denel and he was told that Essa would be their representative on the matter. 

Saloojee explained that he was reluctant and he spent the next three months avoiding calls from Essa. 

Even with reservations, Saloojee said he met with Tony Gupta and Essa in 2012. Tony made it clear that he was unhappy that Saloojee was not cooperating and he threatened to report him to someone higher up. 

Saloojee told Essa and Tony that if they were interested in doing business with Denel it would have to be done through proper processes. 

He said he was unaware that as he was pushing back on the Guptas, Essa was creating a relationship with then Denel executive Zwelakhe Ntshepe. 

Essa used Ntshepe try and push the VR Laser deal in June 2015. Ntshepe had tried convincing Saloojee that Denel would benefit from a partnership with VR Laser that would create a joint venture which would focus on Asia. 

Saloojee said he was upset by this request and told Ntshepe to tell Essa that he would not give approval to such a deal. 

He said he believes the intention was to understand where he stood so that when the new board came in the deal could likely be approved. 

Essa had in 2014 acquired a stake in VR Laser SA and the Guptas along with Denel, under the new board, had an intention of creating Denel Asia. 

This venture was blocked by National Treasury as it did not follow the requirements of the  Public Finance Management Act  ( PFMA). 

Saloojee said his push back on such led to his firing. 

“It was a very stressful period. I also witnessed what was happening at other SOCs. This methodology of state capture was unfolding at other SOCs. Denel was not an exception. Denel was the target of state capture. To continue with this was a very clear way; you would have a political head that was complying, appoint a  board that is willing to agree and you influence the executive to do what you want them to do or you replace them,” he said. 

“Denel is a classic case of what happened.”

The former CEO said he tried to protect the organisation. 

“I did everything in my ability to protect Denel from taking it from a sustainable organisation. I was aware of that at some point if I did not do what I was asked to do, who knows where we’d be. I do know that I was gotten rid of because I stood in the way of what their project was,” said Saloojee.  

Saloojee was placed on suspension without being subjected to a disciplinary hearing. He insisted through his lawyers that he had to face a disciplinary hearing. 

The issue ended up at the Commission for Conciliation Mediation and Arbitration (CCMA). 

He has concluded his testimony. 

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