Johannesburg mayor Herman Mashaba has taken public enterprises minister Pravin Gordhan to task over a loan that the City of Johannesburg granted to state arms manufacturer Denel.
In a written response to a parliamentary question‚ Gordhan said that a R290 million loan granted by the city to Denel was lawful.
Mashaba on Tuesday released a statement with the heading‚ “Minister Gordhan being Economical with the Truth.”
“I note with concern reports in the media about a recent reply by the Minister of Public Enterprises‚ Mr Pravin Gordhan‚ in Parliament‚” Mashaba said. “In his response Minister Gordhan indicated that the R290 million unsecured loan from Regiments Capital (The City of Johannesburg’s sinking fund management company) to Denel was entirely legal. However‚ Minister Gordhan’s willingness to pronounce on a very limited assessment of the legality of this loan misses the most fundamental point for someone charged with overseeing the prudent use of public money.”
According to reports‚ Gordhan had told Congress of the People MP Willie Madisha that the loan had been approved by the board of Denel on 4 September 2012.
“Government had approved the domestic medium term note in 2007-08 for R2.2bn‚ which provided for both secured and unsecured components‚” Gordhan was quoted as saying.