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In the run-up to the Denel Group’s Board Meeting on 22 February at which the Group’s Management is to submit its proposed restructuring plan to the board, trade union Solidarity sent an urgent letter to Public Enterprises Minister Lynne Brown during the past weekend in which it asks that the Group’s CEO Zwelakhe Ntshepe, Group Chief Financial Officer Odwa Mhlwana, as well as Board Chair Daniel Mantsha, be suspended pending a probe into various allegations of financial mismanagement against them. It is estimated that between 600 and 700 employers could lose their jobs should the restructuring be proceeded with.

According to Solidarity Deputy General Secretary Deon Reyneke, Ntshepe, Mhlwana and Mantsha are facing various incriminating allegations, including allegations of misrepresentation of financial information and financial mismanagement leading to a loss of around R600 million. “Moreover, the Board granted performance bonuses of more than
R8 million to its executive committee having earlier increased the number of its members at a cost of between R16 and R33 million,” Reyneke said.

Reyneke pointed out that criminal charges have already been laid against Ntshepe and Mhlwana after they had instructed at the end of last year that workers’ 13th cheques, which form part of their cost package, be withheld. “In spite of such gross mismanagement and criminal behaviour both Ntshepe and Mhlwana still received performance bonuses of R3,2 million combined,” Reyneke said.

“The Denel Group also had to foot the bill for Mantsha’s court cases and actions, including among others, the controversial Denel Asia agreement, the Fireblade court case and disciplinary processes against the previous chief executive and financial officer which he had initiated and for which the Group had to settle.

Reyneke contends that the Denel Group is now under severe financial pressure while workers will have to bear the brunt of top management’s malpractices. “It is unacceptable that Denel’s top six can simply go on unimpaired and without consequence to tap money and abuse tax money. We therefore call on the minister to urgently adhere to our request to suspend these administrators,” Reyneke said.

Solidarity represents approximately 1 000 employees at the Denel Group.

Click here to read Solidarity’s letter to Minister Lynne Brown.

Issued by Solidarity