Guptas, Zuma in line for billions

2014-08-31 15:00

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Rajesh “Tony” Gupta and Duduzane Zuma stand to benefit from a multiyear infantry combat vehicle contract with Denel worth billions, which will kick off within the next two years.

The two hold a 25.1% stake in VR Laser Services through Craysure Investments, a company wholly owned by Westdawn Investments, according to the Mail?&?Guardian.

Company records show Gupta and Zuma are directors in Westdawn, and both Westdawn and Craysure share a registered office in Midrand, Gauteng.

On its website, VR Laser, tucked in a cul de sac in the Boksburg industrial area on the East Rand, boasts that it is involved in “the supply of steel components for the Armaments Corporation of South Africa’s project Hoefyster, which involves a total of 264 infantry combat vehicles for the SA National Defence Force”.

Denel – the state-owned defence, security and technology solutions company – recently released results for the year to March 2014 showing revenue grew 17% to R4.6?billion and operating profit was up 91%.

It expects “delivery on key local defence requirements”, including the rejuvenation of the army’s fleet of infantry combat vehicles, to boost locally earned revenue in the coming years.

This army contract, which Public Enterprises Minister Lynne Brown described as a “R10?billion investment by government in Denel through the department of defence” during Denel’s AGM earlier this month, is called Project Hoefyster.

When it was unveiled in 2007 by former public enterprises minister Alec Erwin, the project was described as the largest deal in Denel’s history.

It involves the development and manufacture of 264 combat vehicles using scores of local subcontractors, who would be guaranteed business for the next 10 years.

The vehicles will replace the army’s antiquated Ratels, which had been in service for more than 30 years by then.

The project has been beset by delays, but Denel Land Systems has made a prototype of the Badger infantry combat vehicle, with production expected to begin soon.

“Operational testing and evaluation of the Badger?...?are continuing apace with serial local manufacturing expected to start within the next 24 months,” said Vuyelwa Qinga, a spokesperson for Denel.

The first fully completed local Badger is expected to roll off Denel’s production facilities in Lyttelton, Pretoria, late in 2016, according to Qinga.

Gary Naidoo, a spokesperson for the Gupta family, did not respond to questions on Rajesh’s involvement in VR Laser at the time of going to print.

Denel did not to answer questions about who the subcontractors were.

“All Denel subcontractors are selected according to procurement policies applicable to state-owned companies,” said Qinga.

City Press could find no record of an invitation to bid for subcontracts in Project Hoefyster.

Denel group financial director Fikile Mhlontlo said VR Laser was a key industrial player, but denied it was involved in developing the Badger vehicle.

“We have not finalised subcontracting and I confirm that no Badger work has been subcontracted to them,” he said.

Asked about VR Laser’s claim of involvement in the Hoefyster project on its website, Mhlontlo said: “I understand they have an interest to get involved in Badger, but are not involved.”

VR Laser operations head Benny Jiyane did not respond to requests for comment.

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