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Progress made in Denel “irregular spending, fraud” investigations

“There is no need to take Denel to court to force it to investigate allegations of irregularities.”

It was only a matter of time before funds lost to alleged misappropriation and fraud at Denel would be recovered.

This as the aerospace and military technology conglomerate said several forensic investigations into the allegations were “in advanced stages”.

CEO Danie du Toit said the company had, after preliminary investigations, filed a civil action against former executives to recover money lost through the irregular awarding of pilot bursaries.

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He confirmed he had already received several reports concerning improper transactions, irregular appointments and potential fraud.

“We started with thorough investigations more than six months ago, shortly after the appointment of the new board of directors,” said Du Toit.

“There is no need to take Denel to court to force it to investigate allegations of irregularities.”

Other steps to be taken by the company soon included laying charges against former executives, applying to the High Court to review the contracts concluded between Denel and VR Laser and taking disciplinary action against Denel employees implicated in the reports.

“In addition, President Cyril Ramaphosa has established a special investigative unit to probe alleged maladministration and unlawful appropriation of expenditure,” said Du Toit.

“It is highly likely that this will be followed by civil actions to recover the money.”

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Du Toit said Denel was aware of a dossier by Solidarity on alleged corruption and the union’s intention to force the company to investigate.

“It is completely untrue to allege that Denel has been idle on these matters,” said Du Toit.

“We are in an advanced stage of investigations and there is no need to compel us to act through court actions.”

Du Toit said employees, unions and other stakeholders were kept informed about the financial position and liquidity issues, which impacted Denel’s ability to pay salaries on time for the past two months.

“We are encouraged by the positive sentiments towards Denel expressed by government and looking forward to possible decisions on the recapitalisation of the company.”

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