8 September 2009

The editor: PoliticsWeb

Dear Sir

FACTUAL INACCURACIES IN RECENT ARTICLE ON PoliticsWeb

In response to a statement published on your website yesterday titled "Gama saga is one of many mismanagement examples at SOEs - DA" (see here), I would like to bring to your attention factual inadequacies contained therein. No admission to bribery was made by Denel management in the anti-materials rifles to India case.

Denel is currently involved in an arbitration process in India following allegations of South Africa's involvement in influencing the unlawful procurement of weapon systems for the Indian armed forces. Although it would be prejudicial to the arbitration process to provide detail at this juncture as it is also still sub judice, this information is already in the public domain. Denel has disputed the allegations and we have gone to great lengths to state our case during the arbitration proceedings.

Where the matter has impacted on Denel is that the Indian government has cancelled several contracts and will not invite Denel to any further tenders until this matter has been resolved. This has resulted in a loss of market share.

We have brought this to Manie van Dyk's attention, and must ask that you rectify these inaccuracies immediately.

If I can assist with any further information requirements regarding Denel, please do not hesitate to contact me directly. We remain committed to ensuring the public receives the correct facts regarding this matter; a prerogative I am confident we share with you.

Yours sincerely,

ZWELAKHE NTSHEPE

Group Executive Business Development & Corporate Affairs

Issued by: The Denel Group, September 8 2009

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