Solidarity taking legal action after Denel's battle to pay salaries

Denel's office in Pretoria (Reuters)
Denel's office in Pretoria (Reuters)

Union Solidarity announced on Monday evening that it would serve arms utility Denel with court papers on Wednesday and announce further legal action thereafter.

Denel's ability to pay salaries has been hanging in the balance, with the company promising last week - after some uncertainty - that it would be able to pay salaries for the month of July. The utility has used bridge financing to get the funds to pay salaries and has also received a commitment from government for recapitalisation by late September.

Solidarity will announce the details of its court at a briefing in Centurion on Wednesday.

The union's chief operating officer Dirk Hermann said in a statement that the legal action would include an urgent court application with a view to prosecution, in light of a dossier the union submitted to Denel regarding alleged corruption and mismanagement.

"The purpose of the legal action is to protect the money of Denel employees as well as the taxpayer’s money. We dare not be silent about the plundering of tax money any longer. Moreover, we should not let the tax plunderers get away with it," said Hermann.

In the statement, the union also said it was planning on taking similar steps against former directors of the beleaguered power utility, Eskom.

Denel spokesperson Pam Malinda said Denel had not seen the statement from Solidarity but said the utility had had meetings with the union that day.

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