Denel in hot water with Treasury – Natasha Mazzone

DA says company was allegedly issued with legal letters demanding it scrap its joint venture with Gupta-linked VR Lazer Asia

Denel in hot water with Treasury

29 August 2016

Treasury has allegedly issued legal letters to Denel, demanding that it scrap the much maligned joint venture between Denel Asia and Gupta-linked VR Lazer Asia. According to reports, Treasury is ready to go to court to stop this deal.

The DA welcomes this positive move by Treasury to bring this venture to a close and act accordingly. I will be writing to the Chairperson of the Portfolio Committee on Public Enterprises to request a combined meeting between Treasury, Denel and the Department of Public Enterprises to get to bottom of this joint venture once and for all.

For too long, this issue has dragged on and on without a resolution. It began in December last year, when Denel formed this venture with a Gupta-linked firm without permission from Treasury and the Minister of Public Enterprises, as is required by the Public Financial Management Act (PFMA). 

 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 100% owned by Mr Salim Essa. It also cannot be ignored that VR Lazer Asia has no footprint or expertise in the Asian market. This joint venture therefore makes no strategic sense.

 We will continue to fight for our vital state owned entities to ensure that they remain profitable and free from the strangling tentacles of corruption and patronage. Given the need for economic reform and job creation, the urgency to resolve this issue is paramount

Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 29 August 2016