(Archive photo: Maroela Media)
The trade union Solidarity warns that the internal audit on corporate governance issues at Denel PMP must without exception be fully, independently and unpolishedly reported.
Earlier this year, Solidarity formally wrote to Denel’s office of the chief audit manager and requested an urgent investigation into serious issues at Denel PMP.
This followed a staff meeting on 20 January during which employees were told that salaries might not be paid – a shocking indication of the severity of the crisis.
The request focused, among other things, on the appointment of the acting general manager, as well as broader issues of corporate governance, execution and accountability. It also included the failure to implement a cost-effective turnaround strategy approved by the council.
However, employees and stakeholders are still waiting for answers months later.
Derek Mans, Solidarity’s sector coordinator for the defense and aviation industries, says that Solidarity has not yet received the internal audit report either.
“There is no clarity about the investigation’s status, scope or timelines and no certainty about when real feedback can be expected. Accountability must now follow.”
Mans says the auditor general’s long-standing concerns about Denel’s audit outcomes – including repeated “audit abstentions” due to the lack of credible financial statements – put this situation in a very serious light.
“This creates a familiar feeling: when transparency decreases, accountability begins to disappear. It’s a pattern that South Africans from the era of statehood know well. Solidarity’s sources right about Denel provide increasingly concrete information. Any audit report will be measured by what we can independently verify.”
Men further explains that, in an entity where employees’ income, safety and the country’s strategic capabilities are at stake, this delay creates an inevitable question: Is there an investigation or is time being bought?
(Photo: Denel SOC/Facebook)
He is of the opinion that there is a risk that a full report will be replaced with a shortened, polished version – one that focuses more on image management than on the truth.
In the union’s solution, they suggest that a summary is not a substitute for a full audit report.
“This is especially not the case when the core question concerns the integrity of management, accountability and the possible failure of critical decisions,” says Mans.
According to him, Solidarity has an established network of sources right above Denel who can independently test facts, timelines and responsibility.
“Any attempt at concealment or cover-up will quickly be exposed and a half-baked report will certainly not restore trust – it will deepen the crisis,” he says.
Solidarity says further notice is taken of reports of a forensic report issued by Adams & Adams in November which indicates serious shortcomings.
Mans says this report, however, is not the same as the internal audit investigation that Solidarity requested, but also highlights the bigger problem.
“Denel’s crisis cannot be managed with partial transparency and deferred accountability.”
(Archive photo: Maroela Media)
Solidarity demands, among other things, that Denel confirms the following without further delay:
- Has the investigation been completed, and if not, when will it be completed?
- What is the scope and frame of reference of the investigation?
- When will the full audit report be made available?
- What consequences will there be for irregularities, negligence or the failure to carry out council decisions?
According to Mans, employees can no longer pay the price for poor management, delay tactics or “acceptable versions” of the truth.
“Denel’s strategic role and the dignity of its employees require nothing less than full transparency, independence and real accountability.”
He emphasizes that Solidarity will use all available mechanisms to ensure that the full truth – not just a summary – comes to light.
See also Solidarity’s original request for an investigation here.
