DenelEngineering News reports that interim Denel CEO Talib Sadik in his statement in the state-owned group’s 2019/2020 annual report addressed the failure of the company to fully pay the salaries of its employees last year.  

He blamed the group’s lack of liquidity and the Covid-19 pandemic for the problem and stated:  “The most important risk that has been threatening the sustainability of the organisation over recent years is the liquidity challenge it is experiencing.  Liquidity management forms the most important element of Denel’s stabilisation strategy.”  Although the pandemic hit SA after the end of the 2019/2020 reporting period, Sadik addressed its effects, pointing out that the government put the country into a hard lockdown on 27 March last year and kept it in force until 30 April 30.  “This had a severe impact on the economy, and also further exacerbated Denel’s liquidity situation.  This impacted on production and also on the payment of salaries for the months of April to July 2020, with net salaries for the months of May to July not being fully paid to employees, and the payroll third-party statutory payments not being paid from April to July 2020,” Sadik lamented.  He also recognised the contributions of staff members, saying that “the fundamental and much-needed changes that are required to stabilise Denel would not be possible without the support of such a capable and loyal workforce.”

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