Denel Dossier: Solidarity reveals mismanagement of funds at Denel
19 April 2018
The trade union Solidarity has revealed in a report titled Denel Dossier today that Denel’s top management received up to a 60% salary increase last year.
According to Dirk Hermann, Chief Executive Officer at Solidarity, these increases were awarded at the same time when Denel did not have the necessary funds to pay employees their full salaries in December. “Denel has also been bailed out of financial difficulties by the government through several assistance packages and they threatened to retrench hundreds of workers. In spite of Denel’s financial crisis, top management received also performance bonuses of 100%,” Hermann said.
Hermann argues that the Denel Dossier must be regarded as part of Solidarity’s bigger campaign against tax looting. “This follows on Solidarity’s proposed application to place SAA under business rescue and the recent court ruling against Brian Molefe of Eskom,” Hermann said.
In the report, Solidarity requests that Denel’s top management, including the Group Chief Executive Officer, Zwelakhe Ntshepe, and the Chief Financial Officer, Odwa Mhlwana, be suspended pending a forensic investigation.
Solidarity also requests that the alleged financial mismanagement, circumvention of tender procedures, and contempt for internal policy be investigated.
According to the Denel Dossier, the weapon manufacturer deducted an amount from employees’ salaries as part of a savings plan, which would have been managed on behalf of the employees. However, Denel’s financial position was in such dire straits that the employees’ own money could not be paid. “Denel was supposed to manage the funds on behalf of the employees. It seems that the money was used to finance mismanagement,” Hermann said.
Earlier this year, Solidarity has sent numerous documents to former Minister Lynne Brown and later to her successor, Minister Pravin Gordhan regarding the trade union’s concern about the financial mismanagement at Denel. Solidarity has further expressed concern that approximately 700 job opportunities may be jeopardised as a result of the financial problems at the company.
The Denel Dossier also alludes to the division among Denel employees. According to a survey conducted by Denel, 82% of the employees indicated that they have no trust in the Executive Committee. A survey done by Solidarity, confirmed that only eight respondents indicated that they are in a neutral position regarding Denel’s Group Chief Executive Officer, while 535 respondents indicated that they do not trust him. “Proof of dozens of senior management staff who have left Denel recently has also been revealed,” Hermann added.
Solidarity further points to alleged violations of tender procedures and requests that these matters also be probed.
The trade union has revealed documents as proof that the R1,2 million bursary which was awarded to the son of the North West Premier, was done outside the correct procedure and was awarded unlawfully.
According to Hermann, President Cyril Ramaphosa and Minister Pravin Gordhan have already at various events spoken out against corruption and state capture. “Denel has unfortunately not escaped corruption or state capture. The Denel Dossier will be handed to Minister Gordhan with the view of further action,” Hermann concluded.
Issued by Dirk Hermann, Executive Officer: Solidarity, 19 April 2018
