Denel-Gupta: DA requests proof of PFMA adherence in VR Laser venture

11 May 2016

Today the DA has requested that we be furnished with documents relating to the Public Finance Management Act (PFMA) compliance between Treasury and Denel in the dodgy VR Laser joint venture. This deal has direct links to Duduzane Zuma and the Guptas. 

 The DA has also requested a joint meeting with Treasury, the Department of Public Enterprises (DPE) and Denel. 

It simply cannot be ignored that VR Lazer SA is 64.9% owned by a Gupta business partner, Mr Salim Essa, and partially owned (25.1%) by a company, Westdawn Investments, whose majority shareholders are Duduzane Zuma and Rajesh Gupta. Or the fact that VR Lazer Asia is owned by Mr Salim Essa . 

It also cannot be ignored that Denel was blacklisted for 10 years in India and this is being used as the motivation for this joint venture in Asia. 

This follows the DA’s request to summon Denel to Parliament’s Portfolio Committee on Public Enterprises in which a group of Denel representatives left today’s Committee sitting with more questions and more concerns than answers or assurances. 

This is becuase no concrete answers were given regarding adherence or non-adherence to the PFMA as the Denel representatives remained adamant that all necessary requirements had been adhered to and remained adamant that Treasury had been derelict in their handling of this matter.

Denel claim that they are in possession of receipts of requested approval documents from Treasury and that Treasury failed to act within the specified 30 day period under section 54(3) of the PFMA. 

Additionally, the committee was also told by the acting CEO, Zwelakhe Ntshepe, that one of the reasons for the suspension of Mr Saloojee, the ex-CEO, was the fact that a R455 million odd loan from Nedbank had been renegotiated from a previous 5 year payback period to a 6 month payback period resulting in financial chaos at the entity as this sum of liquid cash is simply unavailable.

If this is true, a serious investigation needs to be launched as a matter of urgency as at present Mr Saloojee is receiving over R3 million in pay-outs in lieu of completing his contracted work period. 

This makes no financial or legal sense and as South Africans, we need to question the very notion of this kind of deal which flies in the face of good corporate governance and sound financial practice. It would be rewarding a person who had been negligent with South African funds. 

As a result of this information, we will be requesting Denel to furnish the documents regarding the change of loan agreements. Failing which, we will be forced to lodge a an application in terms of the Promotion of Access to Information Act (PAIA) to get to the full truth of the cleptocracy at Denel. 

The DA will not rest until the Guptas answer to all South Africans regarding the apparent billions they have pilfered from our public purse. It is time for answers and for corruption to be rooted out from government for the sake of all South Africans.

Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 11 May 2016