Public Enterprises Minister Pravin Gordhan on Monday announced a completely new, high-powered, board to turn around beleaguered State-owned defence industrial group Denel. Technically, it is currently an interim board, he explained, because it had not yet been approved by the Cabinet.
He described the appointment of the new board as part of the actions by the new administration of President Cyril Ramaphosa to restore State-owned Companies (SOCs).
"We have to strengthen the governance ... of SOCs," he informed a media conference at the Denel Dynamics plant in Centurion, south of Pretoria. "We are at the beginning of a new path .... We have every confidence that this team ... will help Denel restore itself ... to financial stability."
He reported that, before meeting with the media, he had held a series of meetings with, on the one hand, five trade unions that represent Denel workers and, on the other hand, with some 100 of the Group's suppliers, as well as with the new board. He highlighted that Denel employed highly skilled workers and engineers, some of them with skills that were unique in the country. He cautioned that the next few months would be a difficult transition period for Denel and its suppliers. During the press conference, it was made clear that Denel's shortfalls in payments to its suppliers came to R350-million a month.
The chairperson of the new board is (Ms) Monhla Hlahla, a former CEO of the Airports Company South Africa and a non-executive director at Exxaro Resources. "At the core of Denel are technologies that may start in defence but end up in our houses," she observed in remarks to the media. She pointed out that the new board had been appointed at the start of the new financial year (2018/19) and that its focus for the next few months would be on the group's financial statements. "So you will have to bear with us, a bit."
Other members of the new board include former Denel Group CEO Talib Sadik (currently CFO and executive director of Basil Read) and a member of a previous Denel board, Zoli Kunene (now CEO of Kunene Brothers Holdings) as well as former Council for Scientific and Industrial Research president and CEO (and current head of the Wits Business School) Dr Sibusiso Sibisi. Cheryl Carolus, former South African High Commissioner to London and now chairperson of Peotona Holdings, is also a member of the new board.
In response to a question from Engineering News Online about whether or not it was too early to come up with a new strategy for Denel, Gordhan responded: "There's been lots of strategies, lots of plans. Now there is a new board." There will be a need to hold discussions with Denel's partners in the Department of Defence, suppliers, and so on, he pointed out. The situation of the Group had first to be analysed. That would take a couple of months.
In reply to a question from the media about rumours of job cuts at Denel, he affirmed that rumours were rumours. "We don't want to add to unemployment in South Africa," he added.
The other members of the new board are Professor Tshilidzi Marwala (vice chancellor and principal of the University of Johannesburg), General TT Matanzima, Gloria Serobe (CEO of Wipcapital), Sue Rabkin (a former special advisor to the Minister of Defence), (Ms) Nonzukiso Siyotula (Independent nonexecutive director at Growthpoint Properties), Thami Magazi (acting chief of medium business at Business Connexion Group) and Martin Mnisi (a lawyer and director at law firm Mncedise Ndlovu & Sedumedi).