A Denel G-6 howitzer tank. Picture: BUSINESS DAY
A Denel G-6 howitzer tank. Picture: BUSINESS DAY

State-owned arms manufacturer Denel has placed its group chief financial officer, Odwa Mhlwana, on special leave pending a disciplinary process after serious claims of misconduct were made against him.

However, the arms manufacturer refused to name the "serious allegations".

Denel recently found itself in a financial crisis that led to the company being unable to pay its suppliers and staff salaries.

Business Day understands that the new board, which was appointed in April as part of a clean-up at state-owned entities, has highlighted the lack of accountability by Denel’s executive management to steer the company from the predicament it was in.

Mhlwana’s placement on special leave comes a little more than a month after group CEO Zwelakhe Ntshepe resigned following reports that he signed a questionable R1.1m bursary for former North West premier Supra Mahumapelo’s son.

Ntshepe and former Denel board chairman Daniel Mantsha were implicated in allegations of state capture in a tranche of leaked Gupta e-mails. Mantsha resigned from Denel in March.

On Sunday Rapport newspaper quoted newly appointed Denel board chairwoman Monhla Hlahla as saying there were irregularities surrounding the bursary awarded to Mahumapelo’s son.

The publication said Hlahla had called Mhlwana on Friday and had given him a choice of either going on special leave pending the outcome of disciplinary charges against him, or being suspended. Mhlwana decided to take leave.

Denel said on Monday it had taken the step to place him on special leave to allow for a verification process of the allegations against him.

This would include interviews with Mhlwana’s colleagues. The process would be presided over by an independent chairperson and would be completed by the end of July, the company said.

"Since its appointment two months ago, the Denel board has been approached by various whistle-blowers presenting a number of allegations of serious misconduct against Mr Mhlwana and a few other senior employees of Denel, which still need to be verified before any action can be taken against anyone," it said.

The parastatal said its board had received a number of serious allegations made by whistle blowers since their appointment in April.

These claims were reviewed by the board’s audit committee, which then considers what action needed to be taken.

Denel said the current investigations were concluded while the board was managing its 2018 financial year-end and exploring strategies to relieve the company of its short-term liquidity constraints.

The company has previously said that management — supported by the board and shareholders, including Treasury — was working on resolving the liquidity challenges.