Court denies protection to Denel whistleblower

State arms manufacturing company Denel has brought additional charges against the executive who blew the whistle on the alleged sale of public assets at a devalued price to political cronies.

In response, suspended Denel Dynamics CEO Sello Ntsihlele dragged Denel to court on Thursday, seeking a final interdict that the fresh disciplinary case against him be halted.

But the Labour Court in Braamfontein, Johannesburg, ruled that Ntsihlele should first apply to the chairperson of the disciplinary hearing for the matter to be taken to private arbitration. Depending on the decision, he could weigh his chances of returning to court.

The virtual hearing is scheduled for tomorrow, chaired by advocate Nazeer Cassim SC
– a familiar name in legal processes involving state-owned enterprises.Denel’s fresh charges against Ntsihlele cite that he was dishonest in refusing to pay 50% of the private arbitration costs in the initial disciplinary case lodged last year. He denied he was obliged to pay.

The other two allegations related to his possession of confidential and unauthorised documents that he used to defend himself against the initial charges.

Ntsihlele said in the court papers he was targeted because he blew the whistle on the conduct of Denel’s chief restructuring officer Riaz Saloojee, and his alleged interference with the company’s operations.

Public Enterprises Minister Pravin Gordhan brought Saloojee to Denel last year to lead the project to restructure the company’s business, which included the sale of the so-called non-core assets.

Sunday World reported previously that one example of the alleged devaluation of assets was when three properties worth R1.8-billion were to be sold for R189-million.

The Special Investigating Unit had warned Denel and Gordhan against bringing Saloojee back to Denel, citing it had referred evidence of criminal conduct against him during his previous stint as group CEO in 2014.

The Denel board under Gloria Serobe said then it had acquired a legal opinion that there was nothing wrong with employing the crime-accused Saloojee.
Gordhan said he was satisfied with that.

Ntsihlele said in court papers it would have been unlawful for him to cooperate with Saloojee, which may have caused serious harm to Denel Dynamics and Denel as a whole.

He said his protected disclosure led to him being bullied and victimised. “[I was] asked to resign as a board member, suspended without the opportunity to make representations, and subjected to disciplinary action.”

Ntsihlele alleged the company punished him for exposing the wrongdoing of senior officials.
He also wanted the court to stop Denel from dismissing him pending the outcome of the arbitration process.

In May, Ntsihlele approached the court to force Denel to refer the initial misconduct charges against him for private arbitration because he had made a protected disclosure.

After months of denying that he was a whistleblower, including rejecting a ruling to that effect during a pre-hearing, Denel acceded at the last minute, and the two parties’ out-of-court settlement became a formal order.

In line with the court order, Denel then referred the allegations to private arbitration under advocate Heidi Barnes, SC.

The fresh dispute broke out between the two parties over the arbitrator’s payment.
Ntsihlele alleged in the interdict that Denel tried to introduce new disciplinary charges against him based on their dishonesty in refusing to pay for the costs of the private arbitration.

“Advocate Barnes refused to allow amendments, stating that the court order contained the private arbitration agreement between the parties,” he said.However, in their latest charge sheet, Denel submitted that

Ntsihlele had committed to paying 50% of the arbitration cost, and therefore acted dishonestly. However, Ntsihlele submitted in court this week the private arbitration was proceeding and that it appeared likely that he would be acquitted of all charges.

He said any attempt to discipline him in an internal disciplinary hearing would fall foul of the Labour Relations Act.

Last Friday, he referred the new charges to the bargaining council and requested Denel to withdraw the additional charges or terminate the disciplinary inquiry scheduled for Friday.

But Denel refused, he said.

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