Citizen Reporter
Reporter
2 minute read
7 May 2017
1:11 pm

Gigaba cancels multibillion rand deal with Gupta-linked company

Citizen Reporter

The finance minister's spokesperson Mayihlome Tshwete said it 'didn't make business sense'.

Home Affairs Minister, Malusi Gigaba is seen at the National Treasury during a meet and greet opportunity, 31 March 2017, he was still Finance Minister. Picture: Jacques Nelles

Finance Minister Malusi Gigaba has reportedly cancelled a deal involving Gupta-linked company, Denel, after summoning its board chairman Dan Matsha to Durban on Friday to express his concern about the financial implications of the deal for the National Treasury.

Gigaba further instructed Mantsha to withdraw Denel’s high court application against Treasury, Sunday Times has reported.

The company had challenged former finance minister Pravin Gordhan’s refusal to approve Denel’s joint venture with VR Laser Asia to form a new company called Denel Asia.

Gigaba was reportedly “hard” on Mantsha, further instructing him to deregister Denel Asia and dissolve the venture.

Mantsha confirmed the meeting with Gigaba to the publication, while his spokesperson Mayihlome Tshwete reportedly told the publication that the venture “didn’t make business sense” and also had “financial implications” to Treasury.

Denel had, in March, applied to the North Gauteng High Court for an order declaring it had obtained approval to form a joint venture with VR Laser Asia, which has resulted in the establishment of Denel Asia.

“In spite of the company’s numerous attempts to work with National 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’s acting group chief executive officer, Zwelakhe Ntshepe, said.

“We have always maintained and still maintain that Denel Asia was duly established after following and complying with all the relevant prescripts of the [Public Finance Management Act],” Ntshepe said.

Finance Minister Pravin Gordhan and the Treasury were the first and second respondents in the affidavit, which was lodged in Pretoria.

Ntshepe claimed Denel acted lawfully and in accordance and compliance with the PFMA, “in concluding and forming the joint venture agreement”.

Read more:

Denel, Treasury head to court over Asian venture dispute