State owned companies cannot just simply borrow their way out of the difficulties they find themselves in, Public Enterprises Minister Pravin Gordhan said on Monday.
Announcing the appointment of an interim board at the premises of the aerospace and defence technology company, Denel, in Tshwane, Minister Gordhan, who was appointed to the portfolio in President Cyril Ramaphosa’s February Cabinet reshuffle, said the appointment of a new board is part of government’s ongoing efforts to stabilise state owned companies (SOCs).
“We are here today to announce that we have appointed a new interim board for Denel and it is subject to confirmation at the first Cabinet meeting [that will be held] shortly. The appointment of the board is in line with what President Ramaphosa said in the State of the Nation Address to intervene decisively to stabilise SOCs,” said Minister Gordhan.
Minister Gordhan echoed the President’s commitment to strengthen governance, root out corruption and restore the financial position for state owned companies while also sustaining their developmental mandates.
The Minister said structural challenges within SOCs need to be addressed.
Denel, which is one of the six SOCs falling under the ambit of the Department of Public Enterprises, has in the past been financially stable. Between 2010 and 2016 the company which constitutes over 45% to the local defence industry experienced “phenomenal” growth with revenue growing from just over R3 billion to over R8 billion in 2016.
“In the recent past that reputation has regrettably been lost and much of the good work that we used to do certainly in terms of earning the trust of the South African people has fallen on difficult times,” said Minister Gordhan.
The all-new 12 member board is chaired by former Chief Executive Officer of Airports Company South Africa (ACSA) Monhla Hlala.
Other board members are:
- Zoli Kunene
- Prof Tshilidzi Marwala
- General TT Matanzima
- Gloria Serobe
- Talib Sadiq
- Sue Rabkin
- Dr Sibusiso Sibisi
- Cheryl Carolus
- Nonzukiso Siyotula
- Thami Magazi
- Martin Mnisi
Minister Gordhan said the changing of the board is the first step that government is taking to ensure change.
He said the role of the board is to ensure that good governance is restored and that Denel was a “victim and participated in the process of State Capture and that those processes be reversed”.
The Minister added that it is important to retain the engineering and unique skills possessed by Denel staff and its divisions.
Minister Gordhan, who prior to the media briefing met with the board, also engaged the five trade unions represented in Denel as part of efforts to cultivate an open line of communication.
The Minister also engaged on issues related to the payment of the entity’s suppliers.
“The message we communicated is that we are in a sense opening a new chapter at Denel and with that new chapter there has to be recognition that there’s a transition period of three to six months in which the board will familiarise itself with the nature of the business and the depth of financial issues that Denel is faced with.”
He said the board will use its expertise as a collective to find solutions to the challenges that the company faces.
Other priorities for the board include the reviewing of the effectiveness of the company’s management team as well as the review of major contracts.
Serving the people of SA
“I’m optimist that we are at the beginning of a new path towards recovery on the one hand and making sure that Denel remains an important component of the arms industry in South Africa and equally important remains a crucial partner to the Department of Defence,” said Minister Gordhan.
Meanwhile, Hlala said the board which was appointed today, is pulling together to revitalise the company.
“So for all of us we feel honoured to have been asked to play a role at this time in our country. We believe that we’ve also grown up as a people and capable to look where we are and what challenges we have and to really try and find solutions within ourselves.
“The experiences here are brilliant and I feel honoured as a chair to come and serve with a team as experienced as this one,” she said.
The new board chair further added that the board will for the next few months be focused on nothing else but getting the entity’s 2017/18 financial statements right. – SAnews.gov.za