Armscor faces melt-down as in-fighting continues

The latest crisis comes hard on reports that board Chairman Moreti "Mojo" Motau was dismissed early last month by former Defence Minister Lindiwe Sisulu and is contesting the dismissal.

The news yesterday that Pierre Meiring and Kgathatso Thlakudi had been suspended pending a disciplinary process follows the suspension of two other senior officials a few months ago and represents the continued haemorrhaging of skills and experience from the company.

It is understood that at issue is a critique of the new Armscor strategy, which claims that the board that signed off on it was inexperienced and failed completely to consult senior divisional staff who collectively have hundreds of years of experience in the defence industry and in acquisition.

The critique says that, "in its entirety the (strategy) document shows an abysmal lack of understanding of the business in general and technicalities in particular. It is full of wild, unsubstantiated and illogical statements and totally impractical intentions. There appears to be a significant misinterpretation of the law, practical reality, objective logic, normal business sense and the original strategic intent which gave rise to the existence of Armscor."

Armscor spokeswoman Daphney Chuma, responding to inquiries, said: "The issue around the suspension of Armscor employees is an internal matter that will be dealt with in terms of the prescribed Armscor internal processes."

Democratic Alliance defence spokesman David Maynier said: "It is now clear that Armscor is in complete meltdown. The chairperson, 'Mojo' Motau, has reportedly been fired but won't leave. The chief executive, Sipho Mkwanazi, is acting in the top position and is therefore a lame duck. The civil war between the board and senior management is ongoing.

"And many critical voices within Armscor have been purged. The new Minister of Defence and Military Veterans, Nosiviwe Mapisa-Nqakula, is going to have to deal with the meltdown at Armscor. A good place to start would be to show Motau the door and ensure he leaves Armscor."

One of the principal problems the officials had with the strategy is its suggestion that Armscor, due to its having experience in major acquisitions, should market itself to other regional governments in Africa as an acquisition agency of choice.

The critique says "this shows a clear lack of understanding of armaments acquisition internationally. Military acquisition is one of the most secretive and controlled environments internationally. Countries do not negotiate via third parties, nor do they trust third parties to look after their interests when it comes to national security."

It says South Africa would not allow foreigners to take over its arms acquisition and questions why other sovereign nations would be prepared to do so.

The provision in the strategy that Armscor should "maintain a capability to develop and acquire technologies" was rejected with the observation that "the act specifically states that Armscor must acquire defence material and manage technology projects and does not in any way state or imply that Armscor should provide technology or maintain a capability to develop technology".

A suggestion that Armscor "leverage" its acquisition power to gain further contracts was rejected out of hand as probably a contravention of the Public Finance Management Act.