News24 | Ex-Denel chairperson, former CEO in court on corruption charges

Two officials from state arms manufacturer Denel appeared in the Pretoria Specialised Commercial Crime Court on Friday. (Siphiwe Sibeko/Reuters)

• Former Denel board chairperson Lungisani Daniel Mantsha and ex-group CEO Zwelakhe Nhlanganiso appeared in court on Friday on corruption charges.
• The Investigating Directorate against Corruption said the charges the charges related to their alleged involvement in the approval and creation of the Denel Asia joint venture.
• They were each granted R30 000 bail.

Two top officials from state arms manufacturer Denel appeared in the Pretoria Specialised Commercial Crime Court on Friday on multiple counts of corruption for their alleged involvement in the irregular approval and establishment of the Denel Asia joint venture.

Former Denel board chairperson Lungisani Daniel Mantsha and ex-group CEO Zwelakhe Nhlanganiso Ntshepe stand accused of disregarding a directive from the Department of Finance and later allegedly getting kickbacks for facilitating the deal, the Investigating Directorate against Corruption (IDAC) said on Friday.

"They allegedly signed the venture without following due process and further misrepresented facts to the ministers that the deal was not yet signed while it was," said IDAC spokesperson Henry Mamothame.

The alleged irregular joint venture was a formation between Gupta-linked VR Laser South Africa (VRLSA) and Denel Asia, a private company registered in Hong Kong.

"Denel is said to be a 51% shareholder in Denel Asia, while VRLSA holds 49%. They purported VRLSA to be the only suitable business entity that met all the legislative requirements to enter into a shareholders agreement with Denel, a South African government entity," he said.

The alleged offences were committed between March 2014 March and March 2018.

The pair were accused of disregarding a directive by the finance minister stipulating that all transactions relating to Denel should be subjected to the minister's approval as well as the approval from the Department of Public Enterprises, as required by the Public Finance Management Act (PFMA).

"This was following the finance minister issuing a guarantee to Denel (SA) in the amount of R1.8 billion," said Mamothame.

READ| VR Laser scored R238.6m from Denel's steel deal

He said the pair also stand accused of receiving gratification for their alleged involvement in facilitating the deal.

"It was further discovered that confidential information relating to the affairs of the board of directors was disclosed between July 2014 and May 2016. There were also further discoveries of disregard to the PFMA stipulations by allegedly awarding bursaries without the required authority to do so."

According to a Guptaleaks report by amaBhungane, Daily Maverick, and News24, one day after Denel submitted its PFMA application to the National Treasury on 30 October 2015, Mantsha allegedly forwarded the confidential document to Ashu Chawla, a senior Gupta executive.

The same report detailed alleged gratifications paid for by Gupta-linked companies or associates.

The two were each granted R30 000 bail on Friday and their matter was postponed to 16 May 2025 for disclosures.

Their charges include contravention of the Public Finance Management Act, the Companies Act, the Prevention and Combatting of Corrupt Activities Act, and fraud. 

They were ordered to surrender their passports and not apply for new ones and only approach the court to make an application to amend the bail conditions, should the need to travel arise.

In 2019, the State Capture Inquiry heard how the 2015 appointment of Mantsha had been a continuation of a "takeover" of the company by the Gupta family.

Testimony of former Denel group CEO Riaz Saloojee stated how he believed Denel was a target of state capture. In his testimony, Mantsha and Ntshepe featured prominently alongside Gupta associates, some whom he alleged tried to bribe him.

At the time, evidence leader Paul Kennedy asked Mantsha if Saloojee had ever disclosed that they may have been anything improper coming from the Gupta family or its associates. Mantsha said he had not.

Mantsha told the inquiry that he was not aware that Rajesh "Tony" Gupta had tried to bribe Saloojee. 

"It is my concern… for officials of public entities to accept bribes, I'm completely against it. So, if indeed a situation like that occurred, of course I’m concerned. But… there was no situation under my leadership in my board, where there was a contract which was presented and we were supposed to approve that contract," responded the former chairperson at the time.

Mantsha also dismissed allegations that the Guptas had paid for his overseas trips to Dubai and India, saying he had paid for personal visits and that those in his capacity as Denel chairperson were paid for by the arms manufacturer.