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Daily Maverick reports that the Denel Employees Association has applied to the Pretoria High Court to have the cash-strapped arms manufacturer placed under business rescue and controlled by independent administrators to solve its financial crisis.
The association, which in court papers described itself as a voluntary organisation made up of current and former Denel employees who were owed salaries by the state-owned enterprise (SOE), said Denel had not paid employees their full salaries since May 2020. Vinnesh Singh, a mechanical design engineer at Denel who deposed the association’s affidavit, said placing the company in business rescue would maximise its chances of survival and result in a better return to its creditors, including its more than 2,500 employees. In August, acting Denel CEO William Hlakoane told Parliament that the arms manufacturer owed staff R636-million and suppliers R900-million. The technically insolvent company hasn’t paid PAYE or VAT and, according to Singh, has not paid employees’ medical aid fees, union subscriptions, pension funds or death and disability cover for more than a year. Since May 2020, Denel’s various divisions have been paying employees a portion of their salaries, from around 30 to 80% on a sliding scale. The business rescue court application is expected to be heard on 21 September.
- Read the full original of the report in the above regard by Greg Nicolson at Daily Maverick
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