NEWS ANALYSIS: Patchy business skills of new Denel board members

 

DENEL, the state’s armaments manufacturer, has an asset base of close to R10bn and had a R35bn order book at the end of last year.

 

Among SA’s state-owned enterprises, Denel is a shining success story. In the mid-2000s, the company was loss-making and in serious trouble.

 

But since 2011, the arms manufacturer has turned a profit.

 

Now, Denel has run into trouble with the Treasury by going ahead with a questionable venture with a Gupta-associated company without requisite permission.

 

A new set of directors has been in charge since last July, raising the question: are they fit for the job?

 

Few of them have sat on a board before or have business experience in a large company.

One is an African National Congress (ANC) provincial spokesperson, two are legal advisers to Cabinet ministers and five of the 10 were involved in disciplinary skirmishes of varying degrees of seriousness before joining Denel.

 

When appointing them in July last year, Public Enterprises Minister Lynne Brown issued a short three lines on each.

 

This week, when asked to provide their full CVs, detailing their qualifications and work experience, all declined to do so. Denel and Ms Brown also turned down the request.

 

The directors were given a chance to answer specific questions about their working history, but all declined to do so and so did the Department of Public Enterprises. What follows is information that is already in the public domain.

 

Chairman Daniel Mantsha is a legal adviser to Communications Minister Faith Muthambi. Mr Mantsha famously provided the opinion to Ms Muthambi last year that endorsed the illegal removal of three South African Broadcasting Corporation board members.

 

In 2007, he was struck off the roll for abuse of trust fund money, but was readmitted in 2011.

Thamsanqa Msomi is the legal adviser to Home Affairs Minister Malusi Gigaba.

 

Mr Msomi declined to say whether he was a registered attorney and whether he had ever practised law. Prior to this, he was a public servant in charge of Mr Gigaba’s office at the time he was deputy minister of home affairs.

 

A third lawyer, Pinkie Mahlangu, who is a director of Pretoria law firm SV Mahlangu, also holds a seat on the board.

 

The brief CV provided by the Department of Public Enterprises does not provide any more information about Ms Mahlangu.

 

Another board member, Mpho Kgomongoe, an auditor at a small auditing firm, also has no other board experience, yet is head of Denel’s audit and risk committee.

 

Several of the board members have had skirmishes with the law or with their previous employers.

 

Khumbudzo Ntshavheni, now Limpopo ANC provincial spokeswoman, faced accusations of "dishonesty, deliberate nonperformance and financial misconduct" when employed by the State Information Technology Agency (Sita).

 

Media reports indicate that she left the organisation before disciplinary proceedings took place. Ms Ntshavheni declined to answer questions other than to say that the disciplinary proceedings against her at Sita were unsuccessful.

 

The abbreviated CV distributed by Ms Brown in July last year lists Ms Ntshavheni’s employer as Phore Farms, which is undergoing deregistration.

 

Johannes "Sparks" Motseki also carries a cloud over his head.

 

A former treasurer of Umkhonto weSizwe Military Veterans Association, where he was implicated in the misuse of funds in a forensic report, is a Gupta business partner and holds a small share in one of the family’s companies.

 

Mr Motseki did not respond to questions.

 

Refiloe Mokoena was fired from the Armscor board by Defence Minister Nosiviwe Mapisa-Nqakula in what appears to have been a power struggle in 2013.

 

Ms Mokoena fought for reinstatement all the way to the Constitutional Court, but lost.

Of all the new appointees, Ms Mokoena does have business experience and has held directorships at the Road Accident Fund and Airports Company SA.

 

Nonyameko Mandindi is a quantity surveyor by profession and is described in her linked in profile as "on sabattical in Johannesburg".

 

In 2008, while CEO of Transnet property company Intersite, Ms Mandindi became embroiled in a dispute with the board and its chairman, Papi Kganare. The board resigned en masse, but Jeff Radebe, who was the transport minister at the time, refused to remove her.

 

Themba Nkabinde, previously head of human resources in the South African National Defence Force, and Tauyame Mahumapelo, younger brother of North West premier Supra Mahumapelo, also appear to lack board experience.

 

Mr Mahumapelo resigned from the board recently. Little is known about his skills profile other than that he has an actuarial science degree, and owns and manages a roadside lodge near Rustenburg.

 

Ms Brown’s spokesperson Colin Cruywagen, declined to answer specific questions about the skills profile of board members and said that board members had approval from the entire Cabinet.

 

“The practice of (cabinet) consultation included deliberating on the ideal mix of skills, experience and expertise. This requires a series of iterations until a final list is submitted to Cabinet for approval,” he said.

 

“Collectively these board members possess a number of skills, experience and expertise such as legal, finance, project management, corporate governance and technical expertise and other relevant skills, which contributes toward fulfilling their fidiciary duties as board members to the best of their abilities,” he said.

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