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Guptas named in R10 billion joint venture with state-owned arms maker, Denel

18 April 2016 1:00 PM

Denel directors could face charges of financial misconduct over a R10 billion deal with Gupta-linked company, VR Laser.

Directors of state-owned arms manufacturer, Denel, could face charges of financial misconduct over a R10 billion deal with a Gupta-linked company.

Denel entered into a joint venture with Gupta-owned company, VR Laser, a move that Minister Pravin Gordhan claims to be in contravention of the Public Finance Management Act.

702/Cape Talk's Redi Tlhabi spoke to amaBhungani investigative reporter, Stefaans Brummer, regarding the matter.

Listen to the conversation below:

In 2013, a friend of the Guptas, Iqbal Sharma, starts negotiating to buy VR Laser from it's then owners. He also happened to be on the Transnet Board and the head of the procurement committee.

Stefaans Brummer, amaBhungane investigative journalist

Mid last-year, a new Denel board is appointed. Public enterprises Minister Lynne Brown appoints an entirely new board expect she retains one person who is Sparks Motseki, an MK vets man and a big business partner of the Guptas.

Stefaans Brummer, amaBhungane investigative journalist

Denel prepares to ask Public Enterprises and Treasury for permission to form a partnership with this company. Treasury sends them back to the drawing board.

Stefaans Brummer, amaBhungane investigative journalist

Denel submits the application on 10th December, the day after Nhlanhla Nene was fired. When Des van Rooyen steps into his office, he has to adjudicate on this deal.

Stefaans Brummer, amaBhungane investigative journalist

Denel couldn't get what it wanted. It's waiting for Gordhan's Treasury to give it permission. But the strange thing is that without getting permission, it goes ahead and announces the deal and forms a joint venture and this is 49% owned by VR Laser Asia.

Stefaans Brummer, amaBhungane investigative journalist

The PFMA is clear that board members commit financial misconduct when they go ahead and form a joint venture, an offshore company without gaining permission.

Stefaans Brummer, amaBhungane investigative journalist

18 April 2016 1:00 PM

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