Johannesburg - Part 2 of the State Capture Report has called for investigations to be instituted against the members and directors who sat on the Denel board.
This comes as President Cyril Ramaphosa received the second instalment of the State Capture Report from acting chief justice Raymond Zondo.
The report related to the state-owned enterprises (SOE) Denel SOC Limited (Denel) and some of its subsidiaries and divisions as disclosed in the evidence presented to the commission.
Justice Zondo, chairperson of the commission, said evidence heard by the commission with regard to Denel was that at some point it was a state-owned entity that was highly regarded internationally yet now it was an entity that was almost on its knees.
“It is clear that a very important reason relates to the quality of leaders or lack thereof that is given to these SOEs,” he said.
He said despite former public enterprises minister Lynne Brown heaping praise on the performance of directors who led the agency between 2011 and 2013, group CEO Riaz Saloojee, chief financial officer Fikile Mhlontlo and company secretary Elizabeth Africa were suspended by the Denel board on charges of misconduct in September 2015.
Zondo said the manner in which the appointment of members of board of directors and of chief executive officers at SOEs was often handled proved to be a matter of concern
“The evidence heard by the commission in regard to not only Denel but also certain other state-owned entities has revealed that the executive very often failed to appoint the right kind of people,” said Justice Zondo.
He added: “In regards to Denel, Brown appointed as chair of board an attorney who had previously been struck off the roll of attorneys for a long list of acts of misconduct.”
He further maintained: “In 2016 the board of directors of Denel that was led by Daniel Mantsha failed to carry out a disciplinary inquiry or inquiries were held within a reasonable time. In failing to agree to reasonable proposals made by the suspended executives which were aimed at and would have ensured that the allegations against the executives were tested expeditiously and the matter was solved without undue delays and in making the payments that the board made to the executives to get them to leave Denel.”
Zondo said in this regard the commission recommend that law enforcement agencies should conduct further investigations as may be necessary with a view to possible prosecutions of members of the board of directors.
“Mantsha and other directors who supported his campaign against the three executives have prima facie shown themselves unfit to be directors of a company,” said Justice Zondo.
He said Denel DPE and companies and the Intellectual Property Commission would all have standing to consider bringing appropriate proceedings against Mantsha and other members of the 2015 Denel board who were shown to have abetted Mantsha in his efforts to capture Denel for the Guptas.
Political Bureau