Brown reveals details of precarious financial state of Denel

In December, Denel confirmed its lack of cash was affecting its ability to pay its employees.

FILE: Public Enterprises Minister Lynne Brown. Picture: Thomas Holder/EWN.

JOHANNESBURG - Public Enterprises Minister Lynne Brown has revealed details of the precarious financial state of the state’s arms manufacturer Denel.

In a written response to a parliamentary question, Brown has also indirectly confirmed testimony by a whistle-blower in the Eskom inquiry that Denel used the services of controversial financial advisory firms Regiments Capital and Trillian to raise money.

In December, Denel confirmed its lack of cash was affecting its ability to pay its employees.

Brown has confirmed that in November, the company owed its suppliers R668 million.

In November, Denel had R266 million of debt on its books coming due in 30 days.

A further R151 million had already been owing for 120 days.

In another written reply to a question from the Democratic Alliance, Brown confirmed that Denel’s former CEO Riaz Saloojee authorised the appointment of Gupta-linked Regiments Capital in 2012 to raise R290 million for the arms manufacturer.

In 2013, Denel’s acting CEO Zwelakhe Ntshepe authorised another contract with Regiments through which R400 million was raised.

This confirms testimony by former Regiments and Trillian employee Mosilo Mothepu at a parliamentary inquiry, that Denel was among the parastatals that offered lucrative deals to the advisory firms, thanks to Gupta-family ally, Salim Essa.