Denel asked to motivate its proposed venture with Gupta-owned company
Denel reportedly said last week it had set up a joint venture with the Gupta-associated company.
JOHANNESBURG - National Treasury says state owned arms manufacturer, Denel, needs to motivate why it wants to enter into a joint venture with a company owned by the Gupta family before the department can even consider the application.
The Guptas have been at the centre of controversy over their ties with President Jacob Zuma and their perceived influence on ministers' appointments.
Denel reportedly said last week it had set up a joint venture with the Gupta-associated company, VR Laser Services.
But Treasury's Ismail Momoniat says it would be illegal if the deal proceeded without the finance minister's approval.
"If an entity has proceeded without approval, that's a very serious transgression and certainly that needs to be dealt with in the first instance."
The joint venture, to be called Denel Asia and based in Hong Kong, would manufacture a variety of steel products for defence, mining, rail and transport industries and would be 51 percent owned by Denel and 49 percent owned by VR Laser Services, media reports said.
Oakbay Investments lists VR Laser among the firms that are part of the group on its website.