Minister Pravin Gordhan’s master plan to sell SOEs

Public Enterprises Minister Pravin Gordhan allegedly has a well-orchestrated plan to frustrate and elbow out top government executives and officials to weaken state-owned enterprises so they can be sold for a song to his cronies.

Gordhan’s latest verbal tirade against a top executive in the government-owned arms manufacturing company Denel Dynamics was caught on tape and was heard by The Sunday Independent this week.

Denel Dynamics CEO Sello Ntsihlele believes he is Gordhan’s next target in the bid to weaken the state-owned arms manufacturer so it can be sold piece by piece. Ntshihlele has submitted four grievance claims in a matter of a month, and one of them is against Gordhan.

Ntshihlele claims Gordhan verbally attacked him on August 24, and said this was a clear “abuse of power” by the minister which could not be allowed to go unchallenged. In an audio recording heard by The Sunday Independent this week, Gordhan can be heard lashing out at Ntsihlele, saying he “must leave the company and allow us to run the business and cannot continue to draw a salary and continue to behave like this”.

Gordhan was triggered by allegations that Ntsihlele had told Denel’s trade union stakeholders in a meeting that the company’s board was “useless”.

“Forget about reckless trading – this is reckless management,” said Gordhan in the audio recording.

In his employee grievance letter, Ntsihlele said: “My view is that these threatening remarks by the minister and other senior officials in Denel and the (Department of Public Enterprises) constitute intimidation and abuse of power on their part – as it essentially encourages those under their influence to victimise me.”

He said Gordhan’s “attacks on me started just when I arrived at the (virtual) meeting“. Ntsihlele added: ”He could not wait to launch an attack on me, as he started this even before I could sit down.“

He continued: “The directed attacks were further revealed by the minister’s comments about me not involving Aeronautics people on our UAE trip, suggesting that he has been in other conversations about the issues in Denel and he has taken sides – against me”.

In a previous grievance Ntsihlele filed on 5 August, he complained to former Denel interim group CEO William Hlakoane that the CEO of Denel Aerostructures Mike Kgobe and the executive manager of engineering and continued airworthiness Shalan Chetty allegedly shared and discussed “sensitive client and proprietary information belonging to Denel and specifically Denel Dynamics” with a competitor or competitors in the UAE “without being mandated to or getting approval“.

“We believe their involvement constitutes a serious transgression, with detrimental consequences for the business of Denel Dynamics and Denel as a whole,” Ntsihlele said.

He said that “as CEO of Denel Dynamics I am legally obligated to fulfil the responsibilities assigned to me using the powers bestowed upon me by the board“. Ntsihlele went on to say: ”This includes managing the overall operations of the organisation as well as managing company strategy.“

As it stood, he said, “my ability to fulfil this role effectively and ethically is being hampered and interfered with by the actions of certain individuals within Denel“.

As a remedy, he wanted “Kgobe and Chetty and their associate [to] be instructed to stop these activities”. He also asked for an investigation into the circumstances that led these discussions to be conducted. In addition, he asked for a “disciplinary enquiry into the conduct of Messrs Kgobe and Chetty (to) be held”.

The Sunday Independent learnt that in total Ntsihlele had filed four employee grievances concerning Hlakoane, whose term of office ended in August. Company policy required that employee grievances be attended to within five days, the publication heard. Last week Denel spokesperson Pam Malinda told City Press that the company could not comment on the merits of Ntsihlele’s grievances, and that the matter was still subject to internal processes in terms of the company’s disciplinary code and grievance procedure.

Public enterprises spokesperson Richard Mantu told the publication that Gordhan refuted Ntsihlele’s allegations with the contempt they deserved, adding: “Denel was one of the SOEs impacted by state capture, as evidenced in the Zondo Commission report. The minister and the department won’t be deterred or distracted from confronting corruption and maladministration at Denel.“

A person sympathetic to Gordhan said the allegations against him were not new and had been following him for ever “without any basis”. The person said Gordhan was doing his best to turn Denel around, including securing more than R3 billion recapitalisation from Treasury, appointing a new board, and approving the new strategy for sustainability. There is no basis to the allegations, the person said.

One senior executive, who asked not to be named for fear of reprisals, yesterday said Gordhan only targeted black executives “to build a narrative that blacks are incompetent”.

“The minister only targets black executives and can’t do the same thing at Eskom because those in charge of the power utility are white,” one senior executive said.

The source added that Gordhan had frustrated Phakamile Radebe while he was Eskom executive, but failed to lift a finger over André de Ruyter and Jan Oberholzer, who had the worst track record.

“Radebe was frustrated and forced to resign from Eskom, and he was doing far better than De Ruyter and Oberholzer,” he said.

The executive added that the list of all black executives and officials that had been allegedly targeted by Gordhan in his quest to implement his “master plan to sell the SOEs” is endless.

“The plan is to weaken the SOEs, underfund them, and get rid of the top executives so it can be easy to sell them for a song to his cronies.”

Ntshihlele told The Sunday Independent this week that he was also being “targeted” by Gordhan. Before Rabede was forced out at Eskom, Gordhan started with former SAA chief executive Vuyani Jarana, who was forced to resign less than two years into the job, allegedly after he was “frustrated” by the minister.

SAA was sold for R51 in February this year to Takatso Consortium, which was allegedly “hand-picked by the minister in an irregular and unlawful manner”.

Gordhan’s hand in the sale of the SAA deal was exposed by suspended Department of Public Enterprises director-general Kgathatso Tlhakudi, who also lodged a grievance against the minister last week.

Tlhakudi claims in his court papers that Gordhan suspended him when he “started seeing me as an obstacle to the programme that he was embarking on of disposing of state-owned enterprises and their assets in a fraudulent and corrupt manner”.

Tlhakudi last week wrote a protected disclosure letter to Speaker of Parliament Nosiviwe Mapisa-Nqakula and President Cyril Ramaphosa asking them to investigate Gordhan for corruption.

Tlhakudi also believes he is one of the black executives who are targeted by Gordhan to weaken the SOEs to sell them for a song to “a few privileged individuals who were favoured by the minister in an irregular manner”.

Tlhakudi told the chairperson of his disciplinary hearing, Advocate Rataga Ramawele SC, last Friday that Gordhan allegedly has a “master plan to sell the SOE to his cronies”.

In his protected disclosure letter to Mapisa-Nqakula and Ramaphosa, Tlhakudi said the sale of SAA was “ill-conceived”.

“The SAA transaction was now, in my considered view, a template for how the rest of the SOE portfolio was intended to be disposed (of) to the detriment of the South African citizens, who are the ultimate shareholder of the state-owned assets,” the letter states.

-Sunday Independent