Why Denel remains in joint venture limbo
The arms maker faces liquidity challenges and decreased demand locally, Lynne Brown tells MPs
Arms manufacturer Denel had been unable to take advantage of fast-growing Asian markets because the Treasury has still not given approval for the establishment of Denel Asia, Public Enterprises Minister Lynne Brown said on Wednesday. The restraint on its marketing drive existed while the company faces liquidity challenges and the falling off of local demand. Denel Asia is a joint venture between Denel and VR Laser Asia, owned by Gupta family associate Salim Essa. Denel submitted a formal application for approval for Denel Asia under the Public Finance Management Act in December 2015. When it did not get a response within 30 days, it went ahead and registered the joint venture company in Hong Kong in January 2016. This resulted in a standoff between Denel’s board and Finance Minister Pravin Gordhan. Brown has approved Denel Asia, but has told Denel it is not allowed to trade until Treasury approval has been obtained. "We have not heard from [the] Treasury," Brown said in a briefing t...
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