Denel HQ in Centurion. l SIPHIWE SIBEKO/REUTERS
Johannesburg - The disciplinary case of suspended Denel Dynamics CEO Sello Ntsihlele is set to blow the lid on secret deals to sell the state arms manufacturer's assets to politically connected cronies in bits and pieces to dodge intense public scrutiny.
The bulk of the 18 charges served last month on Ntsihlele relates to his refusal to implement “illegal instructions" to enable the alleged crooked sale of valuable assets, including intellectual property, at a dime.
And for his efforts to block taxpayers' money from subsidising cronies of powerful figures with an interest in the sale of public assets under a blanket restructuring plan that lacked detail, and research and was yet to be approved, Denel seeks to dismiss Ntsihlele if he is found guilty.
A prime example is the charge relating to Denel's attempt to sell three properties at its Irene campus for an amount of R189 million. However, at least one of the three properties was valued at R600m.
An insider asked: "It would cost roughly R1.5 billion to build these three properties from scratch, so why would Denel sell these assets for such a cheap amount? Who stands to benefit from this transaction if the public loses so much?"
Among the charges that betray Denel’s witch-hunt is the allegation that Ntsihlele leaked information to the Sunday Independent about an article last November. The story exposed Public Enterprises Minister Pravin Gordhan's intimidation tactics against Ntsihlele on at least two occasions.
Ntsihlele filed four employee grievances last August, including one against Gordhan – who had attacked him verbally – but the company failed to address his concerns. Instead, some of the senior executives who have pressed charges against Ntsihlele are among the people he had lodged grievances against.
According to the charge sheet, Ntsihlele is accused of gross insubordination relating to an incident where his juniors refused a rushed instruction to transfer "valuable" intellectual property on unmanned aerial vehicle designs to a phantom unit when the restructuring plan was still in the consultation phase with unions and employees.
Having failed to persuade the junior staff, Denel executives turned to Ntsihlele and instructed him to instruct his juniors to comply. But he declined for the same reasons that his subordinates had put forth.
"Their argument was that Denel's group CEO, Michael Kgobe, had sufficient executive powers to override all of them and approve the same instruction if he believed he would have been acting within the bounds of the law.“
In the second related gross insubordination charge, Ntsihlele is accused of refusing to “execute an executive management and board decision relating to the implementation of the restructuring process concerning the relocation of Unmanned Aerial Vehicles (UAVs)“, including transferring the intellectual property to a unit called "Air Capability Division," which was only an idea on paper as part of the restructuring plan and awaiting regulatory approval.
In another incident, reflected in the charge sheet, Denel created work streams in a bid to bypass Ntsihlele's authority and gain access to information that he and others were protecting. When the scheme failed, the senior Denel executive came back to Ntsihlele and instructed him to enable the approval of the process by giving these work streams access to Denel Dynamics ICT resources.
He refused because it was not his task since he was not part of the work streams, said an insider. Also, said the person, "there was an impact study outstanding, which was expected to provide a scientific assessment of whether the move would benefit Denel or not”.
The Sunday Independent learnt that the work streams incident was at the centre of Ntsihlele’s grievance against the executives from the group.
Other charges include:
FAILURE TO ACT IN THE BEST INTEREST OF THE EMPLOYER: Ntsihlele is accused of failing and/ or neglecting to intervene in the disconnection of the Integrated Systems Solutions from the Denel Dynamics ICT system, during December 2021 allegedly by one of his subordinates, known to the publication, who has since left the company.
DISHONESTY: It is alleged that in an act of dishonesty, he claimed ignorance of Denel Dynamics’ decision to terminate one of the subunits' access to ICT services despite having been copied in the email communication regarding the disconnection. It is not clear why this is apportioned to Ntsihlele or his business unit as it would appear that other executives were copied in the said email.
GROSS MISCONDUCT: Ntsihlele is charged for promoting one of his subordinates against a directive from Group HR who apparently passed away sometime in July 2022.
DERELICTION OF DUTY: It is alleged that he signed a teaming agreement with a company co-owned by a former Denel executive who was dismissed by Denel as its Group CFO and financial director.
Kgobe said in the letter accompanying the charge sheet that Ntsihlele “failed to exercise a duty of good faith towards Denel, acted in a matter that infringes upon the trust relationship, and failed to comply with the express, implied and tacit terms of your employment contract, by making yourself guilty of gross misconduct”.
“In light of the aforementioned, you are required to attend a disciplinary hearing. The disciplinary hearing will take place on a date, time and venue to be communicated to you in due course,” Kgobe wrote in a letter dated December 12, last year.
Not leaving anything to chance, Denel has enlisted the services of an upmarket Sandton law firm Clive Dekker Hofmeyr to prosecute Ntsihlele.
“You are invited to obtain legal representation at your own cost. Denel will appoint an independent person to chair the hearing, whose details will also be communicated to you in due course", added Kgobe.