Denel’s Asian partner insolvent, says Fuzile
The former Treasury director-general says the Gupta-owned VR Laser SA could battle to raise cash for Asia joint venture
State arms manufacturer Denel entered into its Asian joint venture with a technically insolvent company and one connected to the politically exposed Gupta family. This is according to an affidavit lodged by former Treasury director-general Lungisa Fuzile in response to Denel’s high court bid to acquire approval for the joint venture. Fuzile said Gupta-owned VR Laser SA did not appear to be in a position to raise the funds that would enable VR Laser Asia to establish the joint venture. VR Laser Asia is owned by Gupta associate Salim Essa. "VR Laser SA runs its business operations and capital commitments through loan-financing raised from its shareholders," he said in his answering affidavit. "The shareholders have been identified as politically exposed persons." The affidavit also revealed that the joint venture could be heading for a cash shortfall this financial year.Denel has gone from the shining success story of state-owned enterprises in SA to finding itself in financial diffic...
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