State arms manufacturing company Denel has allegedly aided the state-owned entity’s acting group chief executive officer (GCEO) Mike Kgobe to dodge the bullet by shelving a damning internal memo warning that he and two other senior officials may be guilty of “fraud or dishonesty”.
But Denel spokesperson Pam Malinda says neither the board nor the management is aware of the document. “We are therefore not in a position to provide comment on this”.
According to the memo, Kgobe changed the secondment of a supporting official in the GCEO’s office, to an acting position titled group manager strategy. He further backdated the changed contract by 17 months, allowing seconded official to get acting allowances of R244 000 before tax.
Sunday World has seen the supporting documents including a payslip reflecting the disputed amount.
The October 2022 memo labelled “company confidential”, and addressed to the board, questioned whether Kgobe, who only became interim GCEO in September 2022, had the authority to backdate the acting appointment to April 2021 when he was not in office. Further, said the memo, the disputed position had not existed as an approved position since 2019, and was only created as part of the new structure following a retrenchment process that started in October 2022.
The memo recommended further investigations against Kgobe and the official involved, further stating that there was sufficient evidence for them to be placed on precautionary suspension pending disciplinary action. According to the memo, a human resources official received copies of all correspondence regarding retrenchments, at least regarding the nature of the disputed position and whether the retrenchment process would have an
impact on it.
“Based on the available evidence, under normal circumstances, employees would immediately be charged and subjected to a disciplinary process to determine their guilt or innocence,” wrote the author of the memo, a group manager, whose name is known to Sunday World but cannot be published as insiders fear he could be victimised.
“There appears to be no written motivation to support the change of [the] secondment to an acting position. Kgobe and [names withheld]’s conduct bears the hallmark of possible misconduct (fraud or dishonesty), which resulted in undue benefit in favour of and financial loss to Denel.”
Insiders said the memo was quietly shelved because Kgobe was allegedly among the key people in the scheme to sell Denel’s assets at an under-valued price under the guise of a restructuring process to resuscitate the cash-strapped state-owned company.
“[Names withheld] was unduly enriched by this process,” according to the group manager, who added that Denel’s liquidity challenges were still not resolved, thus the company was retrenching workers, among others, to address cost challenges.
Records showed that the official signed the appointment letter together with Kgobe on September 9, 2022, to confirm he had been acting since April 1, 2021. On that basis, he was due to receive a further acting allowance until the end of his acting period in December 2022.
The official was seconded from Denel Dynamics’ Integrated Systems Solutions to Denel Corporate Office (DCO) under ex-acting GCEO Talib Sadik, whose contract was not extended after expiring in March 2021.
Thereafter, William Hlakoane, who took over from Sadik, also in an acting capacity, kept the official even after his secondment expired in March 2021. Hlakoane allegedly extended the secondment informally, allowing the official to remain at DCO to support him.
“It appears this appointment was done without the involvement of Hlakoane, who was the interim GCEO at the time when is said to have been the acting group manager strategy,” according to the report.
The report added that Thandeka Sabela, as the acting group chief financial officer, also did not seem to have been involved, as it was handled by HR and payroll.
For more business news from Sunday World, click here.
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa.
