Defence and Military Veterans Minister Angie Motshekga, charged with overseeing Denel, maintains three management actions will form part of the ongoing turnaround strategy at the State-owned defence conglomerate.
The actions were named by a Democratic Alliance (DA) public representative in a question to Motshekga, following a late November Denel statement that noted, among others, the turnaround showed “encouraging results”. Denel said it was “quite confident” of its recovery from the damage caused by State capture.
The DA’s Maliyakhe Shelembe asked Motshekga to elaborate on the perceived lack of succession planning at Denel as well as low employee morale and “operational inefficiencies”.
On insufficient succession planning she informed him, in writing in November that: “Our revised three-year (financial year 2026/27 to 2028/29) draws a sharp focus on succession planning for critical positions in executive and senior management, engineering and technical professionals”.
“Our legacy liquidity challenges,” according to the Motshekga response, “that have made it difficult to reward great performance are a key contributor to our low staff morale. We have worked out a revised Employee Value Proposition (EVP) that doesn’t only focus on financial rewards, but on other aspects such as career development and work-life balance. As the turnaround plan takes root, we will be in a position to also offer competitive compensation and rewards to our hardworking workforce.”
To overcome operational inefficiencies, Denel is fostering what Motshekga called “a values-based culture, continuous improvement and innovation”.
The positive developments she outlined to her questioner will remain constrained due to low capital expenditure over the past few years and skill deficiencies.
Shelembe’s party colleague on both the Joint Standing Committee on Defence (JSCD) and the Portfolio Committee on Defence and Military Veterans (PCDMV), Chris Hattingh, reacting to the Denel November statement, said its “positive messaging” created a wrong picture. “Numbers not honeyed words are needed,” he told this publication adding information Denel shared with Parliament last year “tells a different story”.
By way of illustration he said: “For six years in a row Denel has failed to produce proper annual financial statements. The Auditor General has been issuing disclaimers since 2017 and this is mainly because Denel cannot provide reliable records or show that it has proper internal controls”.
“Denel,” according to Hattingh, “needs clean audits, strong and credible leadership, proper engineering capacity, real accountability and a funding model that rewards delivery instead of repeated bailouts”.
On the matter of failing to submit its annual financial statements on time over the last five years, Motshekga told Shelembe that “this has been corrected, as Denel has now submitted all outstanding Annual Reports. An Annual General Meeting was held on 27 November 2025, wherein Annual Reports and related Annual Financial Statements for 2021 through to 2025 were presented and approved. These will be tabled soon. The Minister now expects Denel to meet the legislative requirements in the submission of the Annual Reports.”
On Denel receiving a disclaimer of its audit opinion, Motshekga said Denel has a detailed project plan underway, which is monitored regularly by the Auditor General of South Africa (AGSA). This has the stated aim of getting Denel to a clean audit.
Denel’s perilous financial state was in the spotlight again last month when Denel Dynamics and PMP staff were told the Group did not have enough money to pay their salaries, due on 23 January. Denel subsequently advised them that it had paid their wages for the month.
