'It's such a relief' - Denel staff get millions from attached bank account

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In the recently tabled National Budget, Denel has been allocated R3 billion to settle interest payments.
In the recently tabled National Budget, Denel has been allocated R3 billion to settle interest payments.
Reuters
  • Fourteen current and former employees of Denel were paid almost R4.7 million on Friday from an attached RMB bank account of the state-owned arms manufacturer.
  • The group of employees had the bank account attached and frozen after Denel failed to comply with a court order to pay their unpaid or partially paid salaries dating back to May 2020.
  • Court documents told of the hardships of not being paid or only partially paid. 


A group of 14 current and former employees of Denel were paid almost R4.7 million on Friday from an attached RMB bank account of the state-owned arms manufacturer.

The group of employees had the bank account attached and frozen after Denel failed to comply with a court order to pay their unpaid or partially paid salaries dating back to May 2020.

The North Gauteng High Court in Pretoria granted the order in January this year. Denel did not oppose the application and was ordered to pay within 10 days, by 3 February because of the breach of its contractual obligations to pay its employees.   

Ipeleng Motshegoa of Ipeleng Motshegoa Attorneys in Pretoria, who represented the group, says amounts paid out to members of the group ranged from R200 000 to R600 000 and included accumulated interest. The R4.7 million was not divided equally, because various members of the group were owed different amounts by Denel.

Hardships

Court documents told of the hardships of not being paid or only partially paid. Some of the Denel employees were unable to pay their children's school fees, as well as their bond and car payments.

One former Denel employee, who was among the group of 14 who received payment from the attached Denel bank account, told Fin24 that she resigned in June last year to access part of her pension money to survive. "Later, I had to live on hand-outs from friends after depleting my savings," the person said. Another told Fin24 that the payment was a huge relief, and meant he could support his family again.

Abdul Aziz Toffie, also one of the 14 recipients, told Fin24 on Tuesday that the money he received was for work he had done over a period of 25 months. He is still employed by Denel.

"It is such a relief. I can now hold on to my house and to my insurance and my dignity. I was going to lose everything at the end of March. Although I am ecstatic about getting paid, I am still sad for those colleagues who still have not been paid," said Toffie.

According to Motshegoa, his office has been approached by more former and current Denel employees who are still trying to get paid.

While courts orders have been granted against Denel for breach of employment contracts with their employees, the company is still continuing not to pay its employees their salaries in full or at all, said Motshegoa. "Our offices are now instructed by 34 Numsa member at Denel's Land Systems Division to enforce an order granted on 9 November 2021 by the Pretoria High Court against Denel for their breach of employment contracts with their employees. We are also taking instructions from 13 former and current Denel employees to take Denel to court for breach of contract."

In the recently tabled National Budget, Denel was allocated R3 billion to settle interest payments. The JSE recently suspended Denel’s bonds after the group failed to make interest payments.

READ | Our next job is to rebuild Denel, says Gordhan

Last year Denel's interim group CEO William Hlakoane told MPs the company's balance sheet showed it was technically insolvent, with a negative cash flow of around R600 million, and that it owed a total of over R600 million in unpaid salaries, as well as some R900 million to suppliers.

The arms manufacturer had been hit hard by state capture, with Denel awarding the Gupta-linked company VR Laser two contracts that ran into hundreds of millions of rands. 

* Denel was asked for comment and if any is received this article will be updated.

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