{"id":626043,"date":"2026-01-21T12:07:02","date_gmt":"2026-01-21T10:07:02","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=626043"},"modified":"2026-01-21T12:17:49","modified_gmt":"2026-01-21T10:17:49","slug":"one-south-african-state-owned-company-is-so-broken-that-it-cannot-pay-salaries","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/business\/626043-one-south-african-state-owned-company-is-so-broken-that-it-cannot-pay-salaries.html","title":{"rendered":"One South African state-owned company is so broken that it cannot pay salaries"},"content":{"rendered":"\n<p>Two divisions of South Africa\u2019s once-great state-owned arms manufacturer, Denel, have reportedly informed employees that they would not receive their salaries this month.<\/p>\n\n\n\n<p>Trade union Solidarity says there have been reports that employees of Denel PMP and Denel Dynamics were informed that they would not be paid this month.<\/p>\n\n\n\n<p>Solidarity said the situation is unacceptable and deeply alarming, particularly in light of the far-reaching intervention measures introduced less than a year ago to stabilise Denel\u2019s operations.<\/p>\n\n\n\n<p>Denel is an aerospace and military technology conglomerate established in 1992, when Armscor\u2019s manufacturing subsidiaries were separated from the company.<\/p>\n\n\n\n<p>This was done to facilitate Armscor\u2019s role as the procurement agency for the South African National Defence Force (SANDF), with Denel inheriting the former\u2019s production and research facilities.<\/p>\n\n\n\n<p>Denel is a world-renowned company, but the Guptas\u2019 hijacking of the institution during State Capture has severely harmed its reputation and left it financially crippled.<\/p>\n\n\n\n<p>The company has numerous divisions, including Aeronautics, Dynamics, Integrated Systems and Maritime, Land Systems, and Vehicle Systems.<\/p>\n\n\n\n<p>Among Denel\u2019s greatest technological achievements are the Rooivalk attack helicopter, the G6 self-propelled howitzer, the Ratel (Badger) infantry fighting vehicle, and the NTW-20 anti-materiel rifle.<\/p>\n\n\n\n<p>The NTW-20 generated a lot of media interest in August 2013 when it became known that a South African Special Forces officer had used it to make what was then the sixth-longest recorded sniper kill at 2,125m.<\/p>\n\n\n\n<p>Denel\u2019s G6 self-propelled howitzer and G5 towed howitzer are the longest-range guns in their class worldwide.<\/p>\n\n\n\n<p>It also produced the Atlas Oryx utility helicopter, the Umkhonto vertical-launched air defence missile, the Mokopa tandem warhead anti-tank guided missile, and the A-Darter air-to-air missile.<\/p>\n\n\n\n<p>However, despite its excellent products and long history, the company was brought to its knees through mismanagement and corruption.<\/p>\n\n\n\n<p>Denel has reached a state of such collapse that it is unable to publish regular annual reports. Its last published report was for the 2019\/20 financial year, which was itself delayed and only issued in February 2021.<\/p>\n\n\n\n<p>This report revealed that Denel\u2019s revenue plummeted from R6.02 billion in 2018 to R2.73 billion in 2020.<\/p>\n\n\n\n<p>The company recorded a net loss of R1.9 billion, R493 million higher than the previous year. A decade earlier, it made a R111 million profit.<\/p>\n\n\n\n<p>Denel further revealed that it was technically insolvent and had relied on government bailouts to survive.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Solidarity calls for permanent leadership structure to be appointed<\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"675\" src=\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2025\/11\/Denel.jpg\" alt=\"\" class=\"wp-image-617856\" srcset=\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2025\/11\/Denel.jpg 1200w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2025\/11\/Denel-600x338.jpg 600w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2025\/11\/Denel-768x432.jpg 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n\n\n\n<p>Derek Mans, network coordinator at Solidarity, said that they had worked with the Denel board to establish a multidisciplinary task team at Denel PMP in 2024.<\/p>\n\n\n\n<p>\u201cThis task team included active labour participation through two trade unions \u2014 to advise Denel\u2019s executive management and board on a sustainable turnaround strategy for PMP,\u201d said Mans.<\/p>\n\n\n\n<p>The task team operated under approved terms of reference covering, among others, governance, safety, operations, funding, and sustainability.<\/p>\n\n\n\n<p>The team consisted of industry experts, former PMP executives, and experienced former Members of Parliament, including Kobus Marais.<\/p>\n\n\n\n<p>The strategy document was finalised in December 2024 and submitted to the Denel Board, together with comprehensive recommendations and cost estimates.<\/p>\n\n\n\n<p>At a formal board meeting on 18 February 2025, the Denel Board approved the implementation of the turnaround plan, estimated to cost approximately R120 million. Less than a year later, the following happened:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Denel PMP has reportedly experienced four explosions, raising serious concerns about operational control, safety management, and maintenance.<\/li>\n\n\n\n<li>Employees at both Denel PMP and Denel Dynamics have been informed that salaries cannot be paid.<\/li>\n\n\n\n<li>There is no visible accountability for the failure to implement an approved and funded turnaround strategy.<\/li>\n<\/ul>\n\n\n\n<p>\u201cThis inevitably raises the question: where are the consequences for this continued failure in execution and oversight?\u201d asked Mans.<\/p>\n\n\n\n<p>Mans said the growing salary crisis, now affecting more than one division, underscores a systemic governance and leadership failure at the group level.<\/p>\n\n\n\n<p>According to Solidarity, this is further aggravated by the continued absence of a permanent Denel Board, despite expectations that the appointment process would have been completed by December 2025.<\/p>\n\n\n\n<p>\u201cSolidarity has long warned that Denel cannot be stabilised through interim leadership structures, fragmented accountability and crisis-driven decision-making,\u201d said Mans.<\/p>\n\n\n\n<p>Solidarity said the following was now urgently required:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The appointment of a new, permanent board with appropriate expertise in the defence industry, engineering, finance, and project execution.<\/li>\n\n\n\n<li>Consequence management for the non-implementation of board-approved strategies.<\/li>\n\n\n\n<li>A pragmatic management approach with zero tolerance for corruption.<\/li>\n\n\n\n<li>Serious consideration of public\u2013private partnerships to restore sustainability, protect strategic capabilities, and secure jobs.<\/li>\n<\/ul>\n\n\n\n<p>\u201cEmployees cannot continue to pay the price for governance paralysis and leadership vacuums,\u201d said Mans.<\/p>\n\n\n\n<p>\u201cDenel\u2019s strategic role, and the livelihoods of its employees, require decisive leadership, accountability and immediate intervention.\u201d<\/p>\n\n\n\n<p>MyBroadband contacted Denel for comment, but it did not immediately respond by publication. Should the company respond, this article will be updated.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Two divisions of South Africa&#8217;s once-great state-owned arms manufacturer, Denel, have reportedly informed employees that they would not receive their salaries this month.<\/p>\n","protected":false},"author":15,"featured_media":599376,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,18668,40380],"tags":[19625,79812,143],"class_list":["post-626043","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-government","category-trending","tag-denel","tag-derek-mans","tag-solidarity"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/626043"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=626043"}],"version-history":[{"count":3,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/626043\/revisions"}],"predecessor-version":[{"id":626047,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/626043\/revisions\/626047"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/599376"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=626043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=626043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=626043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}