SA state-owned weapons manufacturer Denel said on Thursday that two board members, including chair Monhla Hlahla, had resigned, days after it said several other board members had stepped down.

The company did not give a reason for the resignations, which deepen the crisis at Denel. The company depends on government bailouts and has faced liquidity problems. Denel’s fortunes have worsened during the Covid-19 pandemic as some of its trade unions took it to court after it failed to pay full salaries during some months last year.

Denel, which makes military equipment for the armed forces and for export, said in an announcement on the JSE that a recruitment process for a new board chair was under way. A company spokesperson referred all questions to the department of public enterprises, the main ministry responsible for Denel. A spokesperson said the department would comment at an appropriate time.

Denel is continuing on its downward spiral as its annual report again showed dismal performance in the past financial year.

The report, presented to the public enterprises portfolio committee on Wednesday, indicated the company was insolvent after years of underperformance. MPs were not impressed by the financial position of Denel, which was taken to court last year by employees who were not paid their full salaries.

Presenting the report, CFO Carmen le Grange admitted the company was performing badly.

“It’s been another poor year for Denel, our revenue has been down by 20% over the past few years. This year we have recorded a revenue line of R2.7bn against a high of R8.43bn a few years ago,” said Le Grange.

She said there was a total of R4.4bn in losses over the past three years. “We have had an inability to secure new business and execute on our existing work because of the liquidity constraints that we have experienced,” she said.

Hlahla, the former Airports Company SA CEO was appointed in April 2018 to the Denel board. 

In a notice to the JSE this month Denel said Siphiwe Nyanda resigned and this was followed by the resignation of Kabelo Lehloenya. 

After Denel’s annual general meeting held on January 29,  Sibusiso Sibisi and Sue Rabkin also resigned this month.

Reuters, with Staff Writer

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