Irene - Public Enterprises Minister Pravin Gordhan has announced the appointment of a new interim board for Denel after meeting with the state-owned defence company.
Speaking in Irene, Gordhan said Denel had a "good reputation in the past [but] sadly that reputation has been lost".
"The changing of the board is the first step we are taking as governance," he said.
Gordhan announced that the new chairperson of the board will be Monhla Hlahla, the former CEO of Acsa and a non-executive director of various South African companies.
No members of the previous board were retained.
Hlahla said the board would, in the next weeks, be immersed in trying to understand the financial health of the group and would start by scrutinising its 2016/2017 financial results.
The new board
The new board would also include: Zoli Kunene, Prof Tshilidzi Marwala, General Themba Matanzima, Gloria Serobe, Talib Sadik, Sue Rabkin, Dr Sibusiso Sibisi, Cheryl Carolus, Nonzukiso Siyotula, Thami Magazi and Martin Mnisi.
The finance minister said that Denel "faces the threat of collapse unless far-reaching decisions are taken urgently".
Gordhan stated that he had begun a consultation process with key stakeholders to establish a way forward for the entity. "I met with organised labour and a variety of Denel's suppliers to hear their suggestions on how to correct what is wrong," he said.
While the company has had a positive run in the past, this "positive storyline" had "deteriorated significantly because of bad decisions".
The rotation of Denel's board is the second major shake up at a state-owned enterprise after Eskom's board was switched out in January
It was not unexpected. In early March Daniel Mantsha, the former chairperson of Denel's board, stepped down. In February former finance minister Malusi Gigaba had said the group's board was the next up for review at a state-owned enterprise.
Meanwhile in January, the CEO of Denel Zwelakhe Ntshepe told Parliament's oversight committee on public enterprises that the state defence company has a liquidity crisis and has never made “serious money”. “The issue of liquidity at Denel is a serious matter, it didn’t start now,” he said.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER