This weekend official opposition, the Democratic Alliance exposed Denel’s financials, which was hidden in a Parliamentary report on page 70 and not mentioned on the content page when tabled. The DA describe is “clandestine move” which almost kept the financial mess at Denel “hidden away” from public scrutiny.
The DA reiterated its call that Denel and other struggling state-owned entities be placed under business rescue in preparation of partial or full privatisation to suitable partners.
According to the independent auditor, Denel and its subsidiaries did not include any fruitless and wasteful expenditure in the notes to the financial statements, as required by section 55(2)(b)(i) of the Public Finance Management Act 1 of 1999 (PFMA).
Failure to submit financials
Denel’s financials have been delayed for over three months. We have actively tried to force the release of these numbers, with charges laid in October in terms of the PFMA for failure to submit the financials within five months.
Denel have been struggling to pay salaries for a few months now and are facing a cash crunch. The entity is currently looking at a mix of commercial bonds, government guarantee increases and equity partners to keep it afloat. It recently listed a commercial bond of R4 billion on the JSE.
The DA said in a statement “State Capture has ripped the heart of this once proud and profitable entity with the DA having laid numerous charges in this regard… Denel requires an urgent and swift intervention to prevent another bailout which is one Christmas present South Africans cannot afford.”