The Special Investigating Unit (SIU) is investigating the alleged misappropriation of intellectual property rights belonging to state defence firm Denel, reports said.

On Monday, City Press reported that President Cyril Ramaphosa signed a proclamation authorising the SIU to probe allegations that intellectual property for some of Denel’s highly sought-after missiles were stolen by current and former employees.

They were allegedly stolen last April and given to arms company Saudi Arabian Military Industries (Sami). 

On Thursday, BusinessLIVE carried a Reuters report which stated that the SIU’s focus would be on intellectual property rights relating to air-to-air missiles, stand-off weapons, surface target missiles, air defence and unmanned aerial vehicle systems. 

The claims surfaced in 2018.

“The focus area for the investigation in question is unlawful, irregular or unapproved measures or practices in relation to the misappropriation of proprietary and intellectual property rights,” the SIU said.

Stolen intellectual property

Sami is a defence products manufacturing company formed in 2017 and owned by the Kingdom of Saudi Arabia.

A senior Denel executive told City Press that as many as 20 engineers, who have vast amounts of experience in the design and manufacture of missiles, have left Denel for Sami since last year.

Armscor’s acting chief executive, Solomzi Mbada, said that the agency had received information last year that Denel’s intellectual property had been stolen and handed over to Sami.

An internal investigation was conducted and there was no substance to the allegations, Mbada said.

“Armscor can state that the extent of the alleged breach will have to be established first, with further supporting evidence, before any conclusions can be reached. If such an act was committed, it should be referred to the relevant law enforcement authorities for further investigation.”

Denel spokesperson Pamela Malinda said should any new information surface: “Denel would not hesitate to report the same to the authorities.”

Last year, Sami approached Denel for a joint-venture offer, which would reportedly include the acquisition of Denel’s 49% stake in Rheinmetall Denel Munition, a large artillery shells and ammunition company.

Malinda said the company was not planning any joint venture with Sami and there had been no agreements reached.

Fin24 reported on November 6 that Denel was looking to diversify to end loss-making operations.

It secured a R1.8bn lifeline from the government in August amid doubts about its ability to continue paying staff salaries.

– Compiled by Jenni Evans