South African state-owned arms company Denel, which had been blacklisted in India in 2005, is back in India and showed up at DefExpo 2016 in Goa last month.
Denel was blacklisted in India in 2005, over allegations of kickbacks paid to an Indian government official for a contract for 1,000 anti materiel rifles. 400 of these rifles were delivered before the contract was canceled and the company blacklisted. Denel was also supposed to provide a 155 mm artillery system for India’s indigenous tracked artillery project. Because of the blacklisting, this too fell through.
In 2013, all charges were dropped against the company for lack of evidence (no company has ever successfully been prosecuted in India for corruption in arms deals).
Denel’s Strange Bedfellows
Interestingly, Denel has a partnership for the manufacture of ammunition with Rheinmetall, which owns 51 percent of the venture. Rheinmetall is currently blacklisted in India, facing allegations of corruption in an earlier order.
Denel has been the facing trouble back home because of the setting up of Denel Asia, a Honk Kong-registered company, as Denel’s marketing arm in Asian countries including India, apparently without the approval of the South African Treasury. The Minister of Finance, Pravin Gordhan has called it illegal.
The photograph above (taken with a phone) appears to indicate Denel Asia was exhibiting on behalf of Denel at DefExpo 2016.
Denel Asia is owned by Denel and VR Laser, which has significant shareholding by the prominent Gupta family as well as the son of South African President Jacob Zuma. The Gupta family have gained notoriety in recent times due to allegations of malpractice in business dealings and proximity to Zuma. To say the least.