27 May,2017 08:02 AM IST | Cape Town | IANS
South African Finance Minister Malusi Gigaba has opposed a multi-million dollar deal involving South Africa's state-owned weapons manufacturer Denel and Indian origin business family Gupta-linked company
South African Finance Minister Malusi Gigaba has opposed a multi-million dollar deal involving South Africa's state-owned weapons manufacturer Denel and Indian origin business family Gupta-linked company.
This came after Denel Chairperson Daniel Mantshe told parliamentarians on Thursday that Gigaba's concern over the deal would be resolved, Xinhua news agency reported.
The National Treasury on Friday said Gigaba in a meeting with Mantshe earlier this week discussed the Denel Asia joint venture.
Gigaba has reiterated his opposition to the joint venture with VR Laser Asia, owned by the Guptas, given the fragile financial situation that Denel is in, said National Treasury spokesperson Mayihlome Tshwete.
The minister further asked Denel to withdraw its litigation against the National Treasury, Tshwete said.
"The matter is currently before the court and we would like to respect the process. We will not make any further comment until the matter is finalised. We hope that other parties also respect the court process and refrain from misleading public comments," Tshwete added.
In March, Denel approached the High Court in Pretoria, seeking an order to force the Treasury's approval of the Denel Asia joint venture deal.
In this joint venture, VR Laser Asia will contribute 100 million rand ($7.8 million) in loan to set the ball rolling.
For its part, Denel will contribute the product and its knowledge to the partnership. According to the business plan, it has already spent 500 million rand to develop products.
The projected profit for the joint venture over 10 years is 4.5 billion rand. As VR Laser Asia has a 49 per cent stake, it translates into a forecast profit of 2.2 billion rand.
The deal puts the wealthy Gupta family in the spotlight again and adds grist to the alleged "state capture", in which the Guptas are accused of exerting undue influence on President Jacob Zuma in the appointment of cabinet ministers and the awarding of contracts to Gupta-linked companies.
