‘Denel’s money used to bail out LMT Holdings’

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The State Capture Commission has heard that Denel’s money was used to bail out one of its suppliers, LMT Holdings, despite warnings from auditors.

LMT Holdings received early payment for the supply of armoured vehicles to Denel.

Former Denel Chief Financial Officer Pieter Knoetze told the Commission that a decision was taken to assist LMT Holdings to deliver on its orders as the company was facing financial difficulties.

According to Knoetze, the management team also took a decision to purchase LMT shareholding to ensure the company’s survival.

However, a report by KPMG warned against the decision to acquire a majority stake in LMT.

“So Mr Knoetze, these concerns that you acknowledge were put into the KPMG due diligence report … sure they raise some alarm bells on your part as CFO and nonetheless, you recommended for approval,” evidence leader Advocate Paul Kennedy queried.

Acting Group Executive Supply Chain and Acquisition at Armscor, Sipho Mkwanazi and former Denel group Chief Financial Officer, Fikile Mhlontlo, are also expected to testify.

Pieter Knoetze testifies at the Commission of Inquiry into State Capture:

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