LISTEN: Zondo commission hears how former Denel chair pushed for Gupta venture
The commission of inquiry into state capture has heard how the former board chairperson of state-owned Denel, Daniel Mantsha, pushed for a venture between the company and Gupta-owned VR Laser.
Mantsha is also former president Jacob Zuma's lawyer.
The deputy director general at public enterprises Kgathatso Tlhakudi, who worked at Denel for nine years, appeared before the commission on Monday.
Tlhakudi is the first witness to give evidence related to alleged corrupt activities at the arms company.
He said Mantsha, who had been struck off the roll of advocates only to be reinstated, became chairperson under former public enterprises minister Lynne Brown in 2015.
"With regards to Mr. Mantsha, who was the chairperson, what one normally does is google this person and who they are. We found that at some point Mr. Mantsha was once struck off the roll of attorney's and that is not a good background to bring to an entity like Denel. He had no significant board experience that he was bringing with which was very concerning.”
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He said despite his concerns with the composition of the new board, Brown was quick to point out that she was the shareholder representative and executives must know their place.
Tlhakudi says Mantsha wrote a letter in support of a venture between a Gupta-owned company VR Laser-based in Hong Kong.
Its South African office is reportedly owned by Dududzane Zuma.
The plan was for the two companies to create a Denel Asia to penetrate the India market.
"It's clear that this transaction was a no go. The information we had requested would require a lot of work to be done. There was too little time given to conduct the due diligence report."
He said the fact that the company did not really have a trade record in India and was based in Hong Kong also sent alarm bells ringing.
"Pursuant to our extensive research, we did not find any information relating to the presence of VR Laser or its principles in India. We could not find any details of VR Laser or its principals in the public domain."
Despite this report, Mantsha still wrote a very compelling motivation encouraging Denel to enter into business with the company.
Tlhakudi told the commission during this process a lot of employees were victimised, while the company's finances were suffering and the board failed to meet its targets.