South Africa Arms Maker Suspends CFO Amid Graft Crackdown
(Bloomberg) -- South African arms maker Denel SOC Ltd. suspended Chief Financial Officer Odwa Mhlwana amid a wider government crackdown against corruption and mismanagement at state-owned companies.
Denel follows utility Eskom Holdings SOC Ltd. and South African Airways, which have both suspended their CFOs within the past 12 months. State-owned businesses are at the center of graft allegations that plagued the administration of former President Jacob Zuma, prompting his successor, Cyril Ramaphosa, to order a string of boardroom overhauls to initiate fresh starts.
Transnet SOC Ltd. CFO Garry Pita resigned in April, citing health reasons. That doesn’t absolve him of accountability should he be found to have had a role in any mismanagement at the state and ports operator, the Department of Public Enterprises said at the time. Transnet and Eskom have both been linked with deals involving the Gupta family, who were friends with Zuma and in business with one of his sons. All deny wrongdoing.
Mhlwana has been put on special leave pending the outcome of a probe into allegations of misconduct made against him, Pretoria-based Denel said in an emailed statement Monday. The investigation should be completed by the end of next month. While the CFO has been in the post for less than a year, various whistle blowers have come forward since a new board of directors was appointed in April, the company said.
Denel’s new board has the task of resolving a multi-billion rand debt problem, with 2.3 billion rand ($170 million) of bonds maturing in September. The company, which defaulted on a 290 million rand from the Johannesburg municipality earlier this month, has said it’s in talks with the National Treasury and hoped to have a plan in place by the end of this month. It received a government guarantee late last year to pay salaries and suppliers.
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