Denel has initiated several forensic investigations into alleged fraud and misappropriation of funds conducted by its previous management, and this will soon result in legal actions to recover losses.

Danie du Toit the Group Chief Executive Officer of Denel says he has already received several reports concerning improper transactions, irregular appointments and potential fraud while other investigations are in advanced stages.

The reports were referred to independent legal firms to review the evidence and to assist Denel with the implementation of the recommendations.

Du Toit says Denel is aware of the contents of a dossier on alleged corruption compiled by Solidarity and of the union’s intention to institute legal steps to investigate the issues.

“We started with thorough investigations more than six months ago, shortly after the appointment of the new Denel Board. We have kept stakeholders, including Solidarity, informed about the progress we are making as recently as this week. There is no need to take Denel to court to force it to investigate allegations of irregularities,” he says.

Flowing from the reports on the investigations Denel has already taken a number of corrective steps, including:

• Civil action against some of former Denel executives to recover monies lost through the irregular awarding of pilot bursaries;
• A statement will soon be submitted to the SAPS to lay complaints against former executives identified in the forensic reports;
• An application will soon be launched in the High Court to review the contracts concluded between Denel and VR Laser;
• Disciplinary action will be taken against Denel employees implicated in the reports, pending the legal recommendations;
• Civil claims will be instituted against former Denel executives to recover losses once the quantum of the loses has been determined.

In addition, the President has already published a proclamation to enable the Special Investigative Unit to conduct probes into alleged maladministration and unlawful appropriation of expenditure. It is highly likely that this will be followed by civil actions to recover the money.

“It is completely untrue to allege that Denel has not taken actions to investigate transgressions and recover the money,” says Du Toit.

“We are in an advanced stage of investigations and there is no need to compel us to act through court actions.”

Du Toit says Denel employees, unions and other stakeholders are also kept informed about the financial position of the company and the liquidity issues, which had an impact on Denel’s ability to pay salaries on time for the past two months.

“We are encouraged by the positive sentiments towards Denel expressed by Government and looking forward to possible decisions on the recapitalisation of the company.

“Denel remains a valuable national asset and still has the potential to play a vital role in the country’s economic future and its transition towards the 4^th industrial revolution,” says Du Toit.

Ends

For further information, contact:

Pam Malinda

Cell: +27 (0) 82 686 2198
Tel: +27 (0) 12 671 2662
email: pamm@denel.co.za

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