CAPE TOWN, May 26 (Xinhua) -- South African Finance Minister Malusi Gigaba remains opposed to a multi-million-dollar deal involving South Africa's state-owned weapon manufacturer Denel and a company linked with the Indian Gupta family, the National Treasury said Friday.
This came after Denel Chairperson Daniel Mantshe told parliamentarians on Thursday that Gigaba's concern over the deal would be resolved.
Gigaba held a meeting with Mantshe earlier this week to discuss the Denel Asia joint venture.
At the meeting, Gigaba 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 courts and we would like to respect the process. We will, therefore, not be making any further comment until the matter has been finalized. We hope that the other parties will also respect the court process and refrain from misleading public comments," Tshwete added.
VR Laser Asia is reportedly trying to rake in tens of millions of dollars in profit over the next 10 years from a deal with Denel.
In March, Denel approached the High Court in Pretoria, seeking a court order to force Treasury's approval of the Denel Asia joint venture deal.
In this joint venture, VR Laser Asia will contribute 100 million rand (about 7.8 million U.S. dollars) in the form of a loan to get the ball rolling, the City Press newspaper revealed earlier this week.
For its part, Denel will contribute the product and product knowledge to the partnership. According to the business plan, it has already spent 500 million rand to develop products, the paper said.
The projected profit for the joint venture over 10 years is 4.5 billion rand. As VR Laser Asia has a 49-percent stake, it translates into a forecast profit of 2.2 billion rand, according to the City Press.
The deal puts the wealthy Gupta family on spotlight again and adds fuel 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 with state-owned enterprises.
