Armscor officials went on DSEI spending spree as company struggles

14 December 2011 by defenceWeb

Top Armscor officials spent hundreds of thousands of rands whilst attending the DSEI defence exhibition in the United Kingdom in September, at a time when the state entity received a R594 million bailout, the Democratic Alliance has pointed out.

Members of Armscor’s board attend the DSEI defence exhibition between 13 and 16 September. The delegation included “Mojo” Motau, Chairperson of Armscor, and Sipho Mkwanazi, Acting Chief Executive Officer of Armscor, together with a number of non-executive directors of the Armscor board.

“While on the trip no expense seems to have been spared by Armscor including business class flights, luxury hotels and the use of a limousine service in the United Kingdom,” said David Maynier, Democratic Alliance shadow minister of defence and military veterans. “The Armscor board seem to think there is nothing wrong with zooming around the world behaving like Fortune 500 fat cats.”

Maynier said that Motau has a lot of explaining to parliament to do, such as why it was necessary for the delegation to include non-executive directors including at least RR Mgijima, SA Msibi and LW Mosiako.

Maynier also questioned the hotel and transport arrangements. The delegation booked rooms in luxury hotels on the same night they were flying to the United Kingdom so as not to have to wait to check-in. Booking the hotel cost R3 500 a day. Some of the delegates stayed less than six days, whilst the rooms were booked for that period.

The Armscor delegation made use of a luxury limousine service (Carey’s) to provide transport in the United Kingdom. The limousine service cost the public nearly R43 000 which included transport from luxury hotels in to the National Gallery near Trafalgar Square in London. In addition, the delegation accumulated further costs because the limousines were made to wait for between 45 minutes and 20 minutes on three occasions.

Armscor is dependent on arms sales to make a living. However, the company is struggling in the difficult economic climate - in its last financial it received a government bailout of R594.8 million to balance the books. In the past three years Armscor’s financial assistance from the government totalled R1.6 billion.

Armscor Acting Chief Executive Officer, Sipho Mkwanazi, claimed in the 2010/2011 annual report that the entity is under “considerable financial pressure”.

Maynier said the DA will write to Jerome Maake, Chairperson of the Joint Standing Committee on Defence, requesting him to schedule a special hearing into the “wasteful expenditure on overseas trips by members of the Armscor board”.

Armscor spokesperson Daphney Chuma, who was approached by The Witness for comment last week, said yesterday that, “Armscor has to do marketing in order to support the South African defence industry. The [marketing] leads to job creation and helps to develop the defence sector. All trips by Armscor support this mandate.”