Denel's chief resigns as Gordhan forges ahead with restoring credibility
CAPE TOWN - Denel chief executive Zwelakhe Ntshepe yesterday became the latest parastatal leader to fall as Public Enterprises Minister Pravin Gordhan continued with his quest to restore the credibility of the country’s state-owned entities (SOEs).
Ntshepe resigned from the ailing state-owned arms manufacturer with immediate effect yesterday, just weeks after Gordhan ordered an investigation into how Ntshepe allegedly authorised a R1.1 million guarantee for embattled North West Premier Supra Mahumapelo’s son, Orabile, for flight classes, accommodation, meals and even laundry.
Ntshepe cited personal reasons for his abrupt resignation. Gordhan said he wanted to know if any individuals manipulated processes or abused the company’s resources to get Orabile the bursary.
Ratings agencies have raised concerns over the worsening balance sheets of SOEs that engage in the country’s massive infrastructure projects.
Yesterday, Gordhan said Ntshepe had indicated his intention to leave in the past few days. “We have chosen Michael Kgobe, who is currently the head of Denel Aviation, as the acting chief executive,” Gordhan said.
Kgobe has been with Denel for 18 years. “The board have to be complimented in terms of the speed and agility with which they moved to stabilise the situation.
They have been asked to review all the forensic reports and look at all the information about Denel Asia.
”Last month, Gordhan appointed a new board to ensure good governance, reverse state capture and restore the utility’s image after he said that Denel’s reputation had been lost.
Gordhan was not immediately available for comment. Board chairperson Monhla Hlahla said Denel employees, suppliers, customers and stakeholders remained focused on its turnaround strategy which would deal with the current liquidity and performance problems facing the utility.
Denel has been dogged by crippling financial problems, which saw it struggling to pay staff salaries and suppliers.
In August, Denel cancelled a 51 percent partnership with Gupta-linked VR Laser Asia, citing reputational damage both locally and internationally caused by bad press.
The deal would have seen the Guptas selling Denel’s weapons to India without any benefit to the parastatal. Scrutiny Denel, Eskom and Transnet have been under scrutiny for alleged mismanagement and graft involving the Guptas.
Ntshepe’s resignation comes in the wake of Gordhan’s sacking of the Transnet board on Monday and bringing back ANC veteran Popo Molefe.
In January, Gordhan appointed respected businessman Jabu Mabuza to lead a new Eskom board tasked with restoring confidence at the utility and improving its direfinances.
Last month, President Cyril Ramaphosa referred the graft claims to the Special Investigating Unit.