LIVE FEED: State Capture Inquiry – November 9, 2020
Johannesburg – The Zondo commission will hear Denel-related evidence on Monday.
The former chief financial officer of Denel Land Systems, Pieter Knoetze, Sipho Mkwanazi and Fikile Mhlontlo are expected to take the stand.
The commission last heard Denel-related testimony from Reenen Teubes, formerly DLS’s chief operations officer and currently general manager of combat systems.
Teubes admitted he should have questioned the involvement of the Guptas, their lieutenant Salim Essa and former president Jacob Zuma’s son Duduzane in VR Laser.
He told the commission he should have seriously considered the company’s controversial owners.
WATCH FEED HERE
”Maybe I did not spend enough time in applying my mind around the political ownership environment. To answer the question ‘was I comfortable or not?’
“I think as time progressed and with all the media hype around the owners the level of uncomfort (sic) rose but I cannot give you a point when I said this is uncomfortable but that level of uncomfort rose over time,” Teubes testified.
Evidence leader Paul Kennedy SC quizzed Teubes about the impact of failure to comply with supply chain management prescripts at the state-owned aerospace and military technology company.
”One has to ensure compliance with procurement processes upfront because you don’t know who may be behind particular tenderers and you learn the hard way later in an organisation like Denel that there are all sorts of things that come out of the woodwork,” he explained.
Kennedy added: “And that’s precisely why the process has to be lawful, fair and competitive from the beginning so that the process doesn’t get mired in controversy later when it emerges that a single-source supplier has been allocated to a company whose shareholders are now causing embarrassment to Denel and where procurement processes haven’t been followed.”
Teubes accepted Kennedy’s proposition.
”I fully agree with that. That’s the hard lesson learnt out of this process. I think we’ve also learnt a lesson out of this process to be more critical of what’s happening and not just accept. If you look at one of the values at Denel that has changed, it’s courage and courage is to question,” he said.
According to Teubes, staff at Denel went through a period where they probably did not question enough.
He said in one of the lucrative contracts scored by VR Laser, retired DLS chief executive Stephan Burger negotiated with the Gupta company to reduce the price while the two other bidders did not get this opportunity despite one of them being R100 million cheaper.
“In my years at Denel, I’ve never been in a situation where there was a decision made to have a specific supplier selected out of an evaluation process and then during the negotiations that position changes substantially. I haven’t seen that yet,” said Teubes.
He continued: “The lesson learnt here is after the evaluation process, give everybody an opportunity for a final and best offer before we close, which we haven’t done but I think that’s an area we can improve on.”
Commission chairperson Deputy Chief Justice Raymond Zondo warned against state entities announcing winning bidders when they were still unhappy with the price.
”When you say they’ve won, certainly something like the price should be settled,” Justice Zondo said.