Simnikiwe Hlatshaneni
Premium Journalist
2 minute read
18 Apr 2017
5:41 am

Treasury says it will file affidavit ‘within deadline’ in Denel case

Simnikiwe Hlatshaneni

Treasury is yet to give the go-ahead for Denel's joint venture with VR Laser Asia, which is linked to the Gupta-owned VR Laser South Africa.

Treasury has indicated it would respond within the deadline this month to a court application by state arms maker Denel to have a Gupta-linked Asian arms deal that it signed last year via a joint venture, declared legally approved.

The deal, which was initiated in 2015, has been embroiled in controversy since it emerged the sole owner of the company which signed the lucrative deal was Salim Essa, who has several business links with the Gupta family.

The bone of contention now is that Treasury has yet to give the official go-ahead for the deal and has reportedly threatened to approach the courts to halt the venture.

Treasury’s Yolisa Tyantsi told The Citizen on Monday it had not yet filed an answering affidavit, but would respond “within the deadline”.

Denel’s founding affidavit, which cites the minister of Finance and the National Treasury, was filed at the North Gauteng High Court last month.

Denel’s joint-venture would see VR Laser Asia, which is linked to the Gupta-owned VR Laser South Africa, dealing arms from East Asia via the company Denel Asia.

While Public Enterprises Minister Lynne Brown provisionally signed off on the deal last year, the buck stops with Treasury, which has been in an ongoing public spat with Denel.

“In spite of the company’s numerous attempts to work with Treasury to explain the legal processes followed in establishing the Denel Asia joint venture, this matter remains unresolved and continues to unfairly cast doubt on Denel’s reputation and governance regime,” Denel said in a statement last month.

The court action comes after Treasury last year reportedly threatened to have the courts block the state arms manufacturer from pushing ahead with the deal.

Denel has vehemently denied it flouted any regulations.

“We still maintain that Denel Asia was duly established after following and complying with all the relevant prescripts of the PFMA. We acted lawfully and in accordance, and compliance, with the provisions of sections 51(1)(g), 54(2)(b) and 54(3) of the PFMA in concluding and forming the joint venture agreement,” said Denel’s Acting Group Chief Executive Officer, Zwelakhe Ntshepe.

Having first communicated its intention into the venture in October 2015, according to Denel, it was only asked for further information about the deal in February last year by Treasury after it emerged that the deal would be closely linked to the Gupta family.

VR Lazer SA is 64.9% owned by Essa.

It is also partially owned by a company owned by Duduzane Zuma and Rajesh Gupta, while VR Lazer Asia is 100% owned by Salim Essa.

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