The Zondo commission has heard how former public enterprises minister Lynne Brown appointed a questionable board for state-owned arms manufacturer Denel which failed to meet targets.
Deputy director general at the department of public enterprises, Kgathatso Tlhakudi told the commission how he was asked to “rubber stamp” a list of new board members for Denel which included state capture-linked individuals such as Daniel Mantsha.
Mantsha was appointed as chairperson of the board in 2015 and Tlhakudi said he was surprised by his addition to the list of potential board members as he was not qualified for the job.
He also said he had concerns as Mantsha had previously been struck off the roll of attorneys.
“Mantsha was at some point struck off the roll of attorneys. That doesn’t seem to be a good background to bring to chair an entity like Denel
Mantsha had been accused of being a proxy for the Gupta family. He is alleged to have shared confidential Denel documents with the Guptas.
Tlhakudi said he did as Brown had requested and approved the list of board members, even with reservations, because Brown had fostered a culture of not being questioned and he, in turn, feared for his career.
“One of the things that Brown emphasised very strongly when she arrived at the department is that she is the shareholder representative and that as officials we should know our place and we can’t act without her directive,” said Tlhakudi.
“I had to consider the fact that as things were unfolding that it’s my career that’s on the line. I would have wished at that point to have been a lot stronger in my position, but I wasn’t.”
Tlhakudi said he was also surprised how Brown had completely changed the board as he believed the previous board that served before 2015 had done stellar work and achieved targets.
The DDG also told the commission how Denel’s success had declined over the years after the board led by Mantsha took over.
He said this board failed to meet targets in its first year.
“In the first year of the new board being in control of this entity, they did not meet their corporate plan and the following year, the revenues almost halved. The current board that we have at Denel is still having to deal with the repercussions of the era that has just passed.”
Tlhakudi also spoke briefly about the controversial Denel-VR Laser partnership to establish Denel Asia.
He said it seemed like the deal was a “no go area” even with some issues raised.
The creation of Denel Asia was set to be a joint venture between Denel and VR Laser Asia, a company controlled by Gupta linked Salim Essa. The company was meant to be a vehicle for Denel to sell arms to India.
On Tuesday, the commission will hear more on the controversial deal when former Denel board chairperson Martie van Rensburg and former VR Laser shareholder Benny Jiyane take the stand.
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