‘Denel board Lynne Brown replaced exceeded summa cum laude’ – Zondo
The former chair says she worked with hard taskmasters and the journey was not easy.
Lynne Brown. Facebook.
The chairperson of the commission of inquiry into state capture, Deputy Chief Justice Raymond Zondo, said on Tuesday that looking at Denel’s performance as of 2015, the board at the time would have been awarded something more than summa cum laude if the company’s key performance indicators (KPIs) were an academic qualification.
Van Rensburg reflecting on the Board's handover report, She says Denel managed to achieve targets on most of the Key Performance Indicators. #StateCapatureInquiry
— State Capture Commission (@StateCaptureCom) March 19, 2019
Zondo was hearing testimony from the former chairperson of the state-owned enterprises’ board, Martie Janse van Rensburg, who tabled reports at the commission highlighting the company’s performance during her tenure.
One of the reports is a handover report from the outgoing board Janse van Rensburg chaired to the incoming board former minister of public enterprises Lynne Brown had appointed as a replacement.
The commission heard on Monday that despite Denel’s future looking rosy under Janse van Rensburg’s tenure as board chairperson, Brown replaced the board in July 2015 with a leadership lacking requisite skills and background.
READ MORE: Lynne Brown ‘appointed Denel board with no skills, qualifications’
Janse van Rensburg joined the Denel board in 2010.
She told the commission that according to the handover report, the Denel’s performance against KPIs showed that the board acceded or achieved most of its targets.
Zondo said looking at this performance, the board would have been awarded something greater, if it did exist, than summa cum laude because targets were exceeded, sometimes by double margins, with limited areas where the board failed these targets.
Zondo says according to the report of the board at the time overall reflects best performance. #StateCaptureInquiry
— State Capture Commission (@StateCaptureCom) March 19, 2019
“It seems to me you probably would have got something more than summa cum laude,” Zondo said, to which Janse van Rensburg responded that she worked with “hard taskmasters” though “the journey was not easy”.
The handover report was important because the outgoing board had the responsibility to inform the incoming one of the company’s current status and plans going forward, Janse van Rensburg told the commission.
The tasks of the board Janse van Rensburg chaired from 2011 to 2015 included turning Denel around and improving and growing its revenue, optimising costs, and appointing a new group CEO, among others, she said.
Van Rensburg says when she joined the board in 2010, the strategy was to increase revenue. She says they were first tusked to appoint the group CEO. #StateCapatureInquiry
— State Capture Commission (@StateCaptureCom) March 19, 2019
Janse van Rensburg said Riaz Salojoee was appointed as the new group CEO.
Through a period of time, Denel grew its order book to R35 billion, Janse van Rensburg said, adding that “these were confirmed orders” to be executed over a number of years.
“Waiting in the wings was another R40 billion,” Janse van Rensburd told the commission.
She said as of 2015, Denel’s revenue was at R5 billion, with a noticeable growth seen from 2010 as it grew from R4.5 billion to over R5 billion which helped “Denel grow the top line”.
According to a historical graph tabled before the commission, over ten years up to 2010, Denel was making a loss of nearly R1.5 billion, Janse van Rensburg told the commission.
She said in the period of 2011 to 2015, Denel also won a number of awards, a lot of which related to well-governed state-owned enterprises.
Van Rensburg says Denel won a number of awards relating to well-run entity between 2011 and 2015. She says Minister Lynne Brown commended the entity during the budget vote speech of 2015. #StateCaptureInquiry
— State Capture Commission (@StateCaptureCom) March 19, 2019
Denel also received positive comments on the company’s improved financial performance from former ministers of public enterprise Brown and Malusi Gigaba, who was replaced by the former in 2014, Janse van Rensburg said.
Van Rensburg says former Minister of DPE, Mr Gigaba was also happy with the performance of Denel at the time #StateCaptureInquiry
— State Capture Commission (@StateCaptureCom) March 19, 2019
According to a 2015 review by an external auditing firm, Denel’s board, under Janse van Rensburg, was found to be highly effective, providing necessary oversight and giving direction, she said, adding that its committees functioned effectively.
The review, however, highlighted that financial and defence skills needed to be increased, in particular in the composition of a new board.
Watch the proceedings live:
Van Rensburg say during 2014/15 Denel’s cash facilities improved on a scale which allows the company to mitigate against any liquidity risk. In addition, banks have also granted Denel R10b in facilities on the strength of the company’s balance sheet. #StateCapatureInquiry
— State Capture Commission (@StateCaptureCom) March 19, 2019
(Additional reporting, Brian Sokutu)
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