Former Denel executives appear in court over corruption charges

Two former senior executives of Denel, South Africa’s state-owned arms manufacturer, appeared before the Pretoria Specialised Commercial Crime Court on Friday, facing serious allegations of corruption linked to the controversial Denel Asia joint venture.

Lungisani Daniel Mantsha, the former chairperson of Denel’s board, and Zwelakhe Nhlanganiso Ntshepe, the ex-group CEO, stand accused of misrepresentation, violating financial regulations, and failing to follow ministerial directives.

Allegations Against the Accused

The charges stem from allegations that Mantsha and Ntshepe misled ministers about the legitimacy of the Denel Asia joint venture, falsely stating that the agreement had not been finalized when it had already been signed.

According to Henry Mamothame, spokesperson for the Investigating Directorate Against Corruption (IDAC), the Denel Asia venture involved VR Laser South Africa (VRLSA) and Denel Asia, a private company registered in Hong Kong.

Denel held a majority 51% stake in the venture, while VRLSA owned 49%. The venture, however, became highly controversial due to allegations of corrupt dealings and irregular approvals.

Violation of Ministerial Directives

The misconduct allegedly occurred between March 2014 and March 2018, during which Mantsha and Ntshepe failed to follow regulations requiring financial transactions to be approved by both the Minister of Finance and the Ministry of Public Enterprises.

This requirement was introduced after the finance minister issued a massive R1.8 billion guarantee to Denel, making oversight critical. However, despite this directive, the accused allegedly ignored the rule and proceeded with transactions.

Illegal Benefits and Leaked Confidential Information

Beyond financial mismanagement, the two former executives are also accused of receiving illicit benefits linked to the Denel Asia deal.

Additionally, confidential information related to Denel’s board of directors was allegedly leaked between July 2014 and May 2016. The nature of this information and its potential impact on Denel’s operations remain unclear.

Violation of the Public Finance Management Act

Further compounding the allegations, the accused are also implicated in the unauthorized issuance of bursaries.

Under South Africa’s Public Finance Management Act (PFMA), executives must follow strict guidelines when approving bursaries and financial support programs. However, Mantsha and Ntshepe allegedly bypassed these protocols, raising serious concerns about financial accountability within the state-owned entity.

Bail Conditions and Court Proceedings

Despite the seriousness of the allegations, both Mantsha and Ntshepe were granted bail of R30,000 each. However, their release comes with strict conditions:

• They must surrender their passports and cannot apply for new ones.

• If they need to travel internationally, they must apply for a bail condition modification.

Following their court appearance, the case was postponed to May 16, 2025, for further disclosures and additional evidence.

A History of Controversy at Denel

The Denel Asia joint venture has been a longstanding source of controversy, with concerns about state capture, mismanagement, and financial irregularities.

Denel has faced numerous financial crises in recent years, largely due to corruption scandals and poor financial oversight. The state-owned arms manufacturer has struggled to pay salaries, meet contractual obligations, and maintain its operations, prompting government intervention on multiple occasions.

This latest case adds to the growing list of corruption allegations within South Africa’s state-owned enterprises, reinforcing concerns about mismanagement, financial misconduct, and abuse of power.

Public Reaction and Calls for Accountability

The case against Mantsha and Ntshepe has sparked public outrage, with many South Africans demanding accountability for corrupt officials.

Some analysts believe that more former executives could face charges, as investigations into Denel’s finances and irregular deals continue.

Civil society groups have also called on the National Prosecuting Authority (NPA) and the Special Investigating Unit (SIU) to expedite corruption investigations related to state capture and financial mismanagement.

What’s Next?

With the next court date set for May 16, 2025, all eyes will be on how the State presents its case and whether further evidence will be revealed.

For now, Mantsha and Ntshepe remain out on bail, but their legal troubles are far from over.