LIVE FEED: State Capture Inquiry - October 29, 2020
Johannesburg - The Zondo commission will continue to hear Denel-related testimony today.
Martin Drevin, the land system programme manager of Hoefyster Phase 2, Hendrik Johannes Christoffel Van Den Heever, and Carene Geldenhuis are expected to take the stand.
Former Denel Land Systems supply chain management executive Celia Malahlela yesterday told the Commission of Inquiry into State Capture that her bosses favoured a Gupta-owned company in deals worth hundreds of millions rand.
Malahlela testified before the commission that she wanted the contract to go out to open tender instead of appointing Gupta-owned VR Laser to supply fabricated components to state-owned aerospace and military technology company Denel for three years. She said VR Laser was appointed without her knowledge and that her direct boss never advanced any reason why he decided against the open tender route.
”It is not true that supply chain management supported the awarding of the contract to VR Laser,” Malahlela said.
She said the submission was amended to reflect that supply chain management supported the award.
According to Malahlela, she highlighted her concerns to Denel’s group chief financial officer at the time, Fikile Mhlontlo, and informed him that she was unhappy with how the matter was handled. When she raised her concerns, she was told the agreement with VR Laser supersedes Denel policies.
Commission chairperson Deputy Chief Justice Raymond Zondo said he found it quite strange that agreement supersedes the policies and the law.
“The agreement is supposed to align with policies,” Zondo said.
Malahlela said nothing like this had happened before and that she would have opposed it in any case.
The memorandum of understanding with VR Laser, Malahlela testified, conflicted with the company’s policy and she informed Denel’s former group supply chain management executive, Mandlenkosi Dennis Mlambo.
She said Mlambo refused to sign the document and approve the deviation retrospectively and only scribbled at the back.
Malahlela asked former Denel Land Systems chief executive Stephan Burger to reconsider the agreements with VR Laser and terminate them. She said she was concerned about the agreements with VR Laser as they failed to follow the proper processes. The irregularities included that no request for proposals or open tender process had been followed and pleaded with Burger to carefully reconsider the relationship with VR Laser.
She said in April 2016, VR Laser chief executive Pieter van der Merwe admitted there were ties between the company, the Guptas and former president Jacob Zuma’s son Duduzane. Malahlela further maintained that Burger was negotiating with VR Laser, in a move she described as out of the ordinary. She said she did not know what Burger discussed with VR Laser but he informed her he wanted the company to reduce its price.
”I will discuss with them to reduce their price. I will discuss this outside the normal channels,” she recalled Burger telling her.
Malahlela agreed with Zondo that Burger appeared very supportive of VR Laser being appointed. She said VR Laser was due to supply over 200 Badger armoured vehicles to Denel for the SANDF for over R262 million while LMT Holdings, of which Denel owned 51% at the time, had quoted R165m.
She said VR Laser’s price was also over the budget. Mlambo said the process was manipulated to favour VR Laser. Between 2003 and 2017 VR Laser had secured deals worth over R516m from Denel Vehicle Systems, Denel Land Systems and LMT Holdings.