Denel pulls out of Gupta-linked partnership
It cited reputational damage “both locally and internationally” caused by “negative attention from the media”
State arms maker Denel has announced it is cancelling its partnership with the Guptas.
Denels said it was exiting Denel Asia‚ its 51% partnership with Gupta-linked VR Laser Asia at its annual results briefing on Friday.
It cited reputational damage “both locally and internationally” caused by “negative attention from the media”.
Denel’s acting chief executive Zwelakhe Ntshepe continued to deny the parastatal’s partnership was with the Guptas‚ saying VR Laser Asia is wholly owned by Salim Essa.
Essa is a close Gupta associate.
“We made a JV with a company‚ and the company in my understanding was not owned by the Gupta family‚” he said.
He declined to comment on evidence in the Gupta leaks showing the Gupta family secretly controlled the JV. "We do not have those emails so we cannot comment on them."
Leaked emails show the Gupta family would control Denel’s foray into the Asian arms market through a secret subsidiary in India part owned by Anil Gupta‚ brother-in-law of Tony‚ Atul and Ajay Gupta.
Denel Asia was chasing arms deals worth R100-billion in India‚ the world’s largest arms importer‚ and expected to break even in a year.
Denel’s Asian adventure with the Guptas has dented its image in the Indian arms market after working for a decade to overturn a blacklisting from alleged kickbacks paid to an offshore entity to secure an anti-materiel (military) rifle deal in 2005.
Adani‚ the Indian company that would hold a stake in Denel Asia’s Indian subsidiary‚ said earlier this year it had pulled out of the deal because it wasn’t comfortable with the partners.
Denel’s previous misadventure in India cost taxpayers R500-million with nothing to show for it.
Denel said the Denel Asia debacle had resulted in an opportunity cost and the company would look at “alternative marketing approaches to access the Asia Pacific market”. - BusinessLIVE