More than half a dozen senior appointments at Denel were irregular, according to an independent forensic report, prompting accusations of ethical leadership failure.
The report by “a top audit firm” was seen by Rapport, which said unlawful salary and bonus payments were made in addition to seven irregular senior appointments – some were appointed without posts while other appointments did not follow Denel guidelines.
“Boledi Seopela, group head of human resources, was reportedly suspended shortly after the report was handed over to Denel. At least one of the alleged unlawful appointments made by Seopela – that of Mildred Gwala as head of legal services – has also since been terminated,” City Press reported over the weekend.
The investigators recommend that disciplinary action be considered against Seopela, Tsepo Monaheng, Denel’s executive group chief executive, and chief financial officer Matodzi Mukwevho.
City Press added that certain employees received a once-off December bonus of R10 000 in 2024, which deviated from approved guidelines.
Responding to a DefenceWeb request for comment, Denel said it commissioned an investigation on possible governance failures and the report has been concluded and shared with Denel.
“The report is confidential to Denel and management is unable to elaborate on the issues raised in it. The Company commits to respond to your questions as soon as the internal process is completed.”
In response to the reports by Rapport and City Press, Derek Mans, Solidarity’s coordinator for defence and aviation, said it is now evident that this is a systemic failure of ethical leadership and governance at a strategic state-owned defence company.
He added that recent events around the near non-payment of salaries at Denel PMP and Denel Dynamics in January are also deeply troubling.
“Denel exists to support the South African National Defence Force in fulfilling its constitutional mandate to protect the sovereignty and security of the Republic. For this reason, Denel’s executive leadership’s conduct must be beyond reproach.
“Allegations of coordinated misconduct, if substantiated, represent not only a betrayal of employees and taxpayers, but also a direct threat to institutional credibility and national interest,” said Mans.
The latest developments also follow years of assurances to Parliament that Denel was stabilising after state capture, governance collapse, and repeated turnaround attempts. Significant public funds have been committed to this process, including recent support for Denel PMP.
Mans said employees continue to face uncertainty, reputational harm, and operational instability.
“Solidarity is of the view that Denel can no longer be allowed to operate without decisive consequence management. Allegations of a small group acting as a clique within the company strike at the heart of fiduciary responsibility and public trust,” he said.
Solidarity called on the Denel Board to immediately place the Group CEO, Group CFO, and any other implicated officials on precautionary suspension; ensure full cooperation with law-enforcement agencies; and act decisively to restore ethical governance and institutional credibility.
“Solidarity will closely monitor developments and will not hesitate to escalate the matter through legal, parliamentary, and public channels should decisive action not follow,” Mans concluded.
