State-owned arms manufacturer Denel finds itself in such financial trouble that it is struggling to pay salaries and service its debt.
While a bailout from an unknown source helped the company to pay salaries this month, this does not resolve the financial predicament Denel finds itself in.
The reason for the mess at the company, Denel CEO Daniel du Toit said, is the hangover of state capture and mismanagement.
Speaking to SABC News, du Toit said there is a direct link between state capture involving the Gupta family and the company’s financial predicament.
State capture is, however, not the only reason. “We have to be objective in our assessment – there is also an element of mismanagement and poor efficiencies,” he said.
“The effect of state capture is enormous on the organisation, which is broken and paralysed as a consequence of state capture,” he said.
Apart from the direct financial impact on the organisation, state capture has also done tremendous harm to Denel’s reputation, with a subsequent loss of business.
Du Toit said the Denel board and management are taking action with the support of their audit firms, with legal action against those implicated in corrupt dealings.
He said they are trying to recover some of the money linked to state capture, but that it is not as significant as with some of the other state-owned enterprises.