Denel has given the son of North West Premier Supra Mahumapelo a bursary of R1.1 million to become a pilot.
Rapport reported that Denel will pay for his flight classes, as well other expenses like accommodation, meals, and laundry.
Citing the signed bursary contract, Rapport said Denel had to bend the rules to give Mahumapelo’s son the bursary.
Denel initially said there was nothing untoward regarding the bursary and it was aimed at driving transformation in the aviation industry.
However, its tune changed after Public Enterprises Minister Pravin Gordhan ordered the company to retract its initial statement.
Gordhan said he ordered an immediate investigation into the matter by the Denel board.
Denel in financial trouble
Denel is struggling financially, and the arms manufacturer tabled an incorrect annual report last year.
The auditor general told parliament it requested auditing firm SizweNtsalubaGobodo to change its clean audit opinion on Denel after irregular expenditure had come to light.
Denel has faced financial problems for years, and in 2015 it was reported that Denel could not pay its suppliers after exhausting its cash reserves.
According to Rapport, the cash troubles started after an acquisition of vehicle manufacturer BAE Land Systems SA for R855 million.
This week, TimesLive reported that hundreds of employees at Denel PMP were told they will be put on short time.
“This is a legal way to employ people for fewer days in order to pay them less in a bid to avert retrenchments,” stated the report.
New board for Denel
The new also follows Gordhan appointing a new board at Denel.
Gordhan promised to hunt down anyone who has stolen money from the group and hold them accountable.
He said the goal is to undo the damage done by years of state capture.
“It’s time to now ask the question: Where is the money, follow the money, and how do we go about recovering it?” said Gordhan.