Stephan Burger, the former CEO of Denel Land Systems, this week defended the appointment of the Gupta family’s VR Laser on a 10-year “sole source” contract.
This follows a report in City Press last week about Denel’s attempt to repudiate debt of up to R40 million it owes VR Laser, which is in business rescue.
Denel is relying on a forensic review report by Ngidi Business Advisory to claim that all its business with VR Laser was irregular and corrupt, making the debts unenforceable.
In a letter directed at the CEO and chair of Denel, as well as the department of public enterprises and others, Burger this week vehemently denied the allegations made in the report, which accompanied Denel’s court papers.
He claims that Denel executives are trying to smear their predecessors and escape the legitimate debts owed to VR Laser, which he calls “one of Denel Land Systems’ best performing suppliers”.
The Ngidi report’s recommendations included that Denel take “appropriate corrective action” against Burger and other former Denel executives for signing the deal with VR Laser to supply the hulls of Badger armoured vehicles, which the SA National Defence Force was procuring under its so-called Project Hoefyster.
This, when Denel’s own subsidiary, LMT Holdings, could do the work more cheaply.
“The fact that I and my team supported a company that had ‘Gupta links’ was 100% production driven, not politically driven,” wrote Burger, adding that he intended to “recoup damages” from the person responsible for tarnishing his name through putting what he called a completely inaccurate report in the public domain.
In his letter, Burger claims that LMT was considered but that VR Laser was simply the better option, based on past performance.
“I ... remain of the opinion that VR Laser was the best candidate for the work,” said Burger.
He also lashed out at individuals identified in the Ngidi report as having been critical of the deal with VR Laser, saying they were being opportunistic after the fact.
“This was first raised long after the valid contract was placed on VR Laser – unfortunately, only to fit their own political agendas.”
Denel released its financial results this week, recording an enormous R1.77 billion loss for the year to March 31 2018.
In the preceding year, the state-owned arms company had a profit of R282 million.
In his letter Burger claims that Denel has procured “forensic report after forensic report” since early 2017.
An initial investigation was conducted by audit firm Sekela Xabiso, but its contract was allegedly suspended before a report was provided, he said.
Burger retired in March this year after Denel refused to give him a separation package late in 2017, he said.