Suspended Denel Group CFO axed with immediate effect

Denel has terminated the employment of previous Group Chief Financial Officer Odwa Mhlwana with immediate effect after he was found guilty of all disciplinary charges relating to irregular expenditure and failing to act in the best interests of the company, Denel said on Friday.

In a statement, the arms manufacturer said it had appointed Wim de Klerk, former CEO of ArcelorMittal SA, as acting GCFO.

A formal process will commence to recruit a permanent GCFO, the statement added.

Denel also gave an update on the recruitment process for a new Group Chief Executive Officer following the resignation of the previous GCEO Zwelakhe Ntshepe in May this year.

"In this regard, Denel has completed the recruitment process for a new GCEO and made a recommendation to the Minister of Public Enterprises.

"An announcement is expected to be made by mid December 2018 once Cabinet approves the appointment," Denel said.

Mhlwana was placed on special leave pending a disciplinary process into allegations of misconduct earlier this year.

At the time, the board said it had taken the decision to create a “conducive environment” for the “verification process” regarding the allegations that had been made. Fin24 previously reported that several serious allegations had been made by whistleblowers since Public Enterprises Minister Pravin Gordhan appointed an interim board in April.

Denel employees are at present facing salary cuts as the company attempts to decrease its debts and turn a profit again after posting losses in the 2017/18 financial year. Its new board is also considering selling non-performing assets, and has appointed a panel of forensic investigators to look into procurement irregularities.

On Friday, Reuters reported that the National Metalworkers Union of South Africa (Numsa) had made an urgent call for a government bailout of at least R7bn into the struggling state-owned company, saying it was a "matter of time" before Denel was "destroyed". 

Numsa marched to the Ministry of Public Enterprises on Friday. 

Earlier in the year, the Denel board said it was working on trying to recover some of the funds lost - reportedly some R400m - through its ties to the now-defunct Gupta-owned company, VR Laser.

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