WeeklySA_AdminBELEAGURED: Today’s auction covers only a small part of the claim made against the parastatal, with several more seizures to take place…
By Isaac Moledi
The assets of Denel, the country’s one-time giant and strategic State-owned defence and technology conglomerate, went under the hammer earlier today.
This development follows union federation Solidarity’s court action to recover money that the crippled State-owned enterprise (SOE) could not secure to pay its employees.
The Sheriff seized the company’s assets in Centurion today – the move believed to be the first with more similar moves against the ailing State-owned company expected, depending on whether Solidarity continues to exert more pressure on the embattled defence and technology company. Solidarity seized Denel’s assets earlier this year owing to the company’s failure to pay about R90 million in debts to Solidarity members in terms of the court order.
It is understood that the parastatal has been struggling to pay its roughly 2 800 employees their full salaries since May 2020 to the point that the North Gauteng High Court in Pretoria ordered it to pay R13.2 million in outstanding salaries to 42 of its current and former employees. About two weeks ago, Weekly SA Mirror reported that the one-time renowned and trusted supplier of the state-of-the-art military and defence equipment was slowly degenerating like a rotting carcass.
Incompetence, mismanagement, a lack of leadership foresight and corruption have torpedoed the giant – like many State-owned enterprises (SOEs) to the point of being unable to pay its employees.
According to defenceWeb, “sustained pressure by way of legal actions is how the labour organisation has gone about ensuring its members employed by Denel receive full salaries and have various employee benefits, including medical aid, paid.” Solidarity resorted to the courts when Denel continuously battled to meet its financial obligations to creditors as well as to staff since 2020.
“Seizure and auction of assets is the only option left to us after Denel failed to honour agreements,” defenceWeb quoted Helgard Cronjé, Solidarity deputy general secretary for the Public Sector, as saying.
“Today’s auction covers only a small part of our claim and is merely the first phase. We have seized Denel Corporate’s bank account and more auctions will follow until the full amount is obtained.
“Denel has taken far too much from our members. It is unacceptable for ordinary workers to sacrifice livelihoods because of indecision and negligence by Denel’s sole shareholder – the State. It is intolerable and steps must be taken with the message now clear: If Denel does not want to pay, our members will receive what’s due to them through the seizure and auctioning of Denel assets.”
The auction took place at 10 am at Denel’s head office in Lyttelton, Centurion, according to Solidarity. It was handled by the Sheriff, a legal entity Centurion-headquartered trade union Solidarity previously turned to in ongoing efforts to ensure members employed by Denel are paid as per employment agreements and contracts.
Denel pensioners and serving employees who belong to the Denel Medical Benefit Trust (DMBT) fund will seemingly by the end of this month (July) have access to the current subsidy amounts owing as this is to be paid to a mutually agreed health insurer. The insurer, according to the statement, will take steps to issue individual policies. This is expected to take about three months with completion expected in November.
defenceWeb quoted Solidarity chief executive Dirk Hermann as saying it was “a disgrace” the non- and under-payment of salaries and employee benefits had to come this far. “The State allowed its assets to be poorly managed, stalked and looted, and is now forced to auction some of what remains,” says defenceWeb quoting Hermann
Thirteen vehicles, including seven pick-up trucks, went under the hammer along with three forklifts, a plasma TV, leather chairs, couches as well as office chairs and desks.
Hermann called the auction “a shame”, arguing: “Behind it are ordinary people who work hard. Many still do to keep Denel going. Some struggle to pay rent, others lost their homes and there are also those with depression. This is in addition to families breaking up, parents unable to pay school fees. This is the other face of State looting – real people with gripping and sad narratives – and the reason why Solidarity keeps on championing them.” The auction site is where what was LIW, the widely accepted acronym for Lyttelton Ingenieurswerke (Lyttelton Engineering Works), producer of the then world-renowned G5 and G6 artillery pieces as well as various turrets for armoured vehicles and tanks, was located. Other once profitable components of Denel, including Mechem, occupied space on the site on the northern side of Centurion, according to defenceWeb.
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