Picture: ISTOCK
Picture: ISTOCK

Riaz Saloojee must have felt optimistic about the future when he stepped off the plane from London in September 2015, returning from the world’s largest arms bazaar with public enterprises minister Lynne Brown.

Under Saloojee’s leadership weapons maker Denel’s aggressive marketing forays into the Middle East and Latin America were beginning to bear fruit.

In 2012 he had taken over an ailing state entity that needed government bailouts to stay afloat. Since then Denel’s revenues had almost doubled, profits had grown close to seven-fold and its order book stood at a record R35bn.

Brown was so pleased with Saloojee’s performance that she wanted him to stay on for another five years after his contract as chief executive expired in January 2016.

But back in Denel’s boardroom a shadowy cast of newly appointed directors had other ideas. Judging by the events that followed, their first task was to remove Saloojee (a former Umkhonto weSizwe commander) to pave the way for a dubious deal worth R100bn between Denel, the Gupta family and their business partner, President Jacob Zuma’s son Duduzane.

The Guptas tried to hide their involvement by structuring it through a company registered in Hong Kong, VR Laser Asia, and setting up a secret subsidiary in India.

But e-mails leaked to the Financial Mail and other media provide evidence that the Guptas were behind the deal all along, with the full knowledge and participation of Denel’s top brass and possibly also key officials in Brown’s department.

Denel’s Gupta partnership has sparked a battle between the arms maker and treasury, which says proper procedures weren’t followed.

Treasury has withheld approval, leaving the deal in limbo. But Denel appears determined to revive it.

In March this year Denel went to court in a bid to have the partnership declared lawful. On May 24 it told parliament it remained the best way to break into the Asian arms market, describing reports that Denel had been “captured” by the Guptas as “fake news”.

The same denials were repeated by the Guptas’ disgraced UK public relations firm, Bell Pottinger, to journalists around the world.

This is an excerpt of Financial Mail's cover story and Stephan Hofstatter's brilliant reporting on How the Guptas captured Denel.

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