This follows allegations that the board “brought the Gupta family into Denel”.

City Press reported last week that Denel has awarded VR Laser a contract for cutting steel for the army’s new combat vehicles.

Ajay Gupta’s son Kamal Kant Singhala, 24, is reportedly the director of VR Laser.

The board said Denel Asia comprises VR Laser Asia and Denel.

“VR Laser Asia has direct relations with VR Laser South Africa and has been doing business with Denel for more than a decade prior to the current board coming into office,” the board said.

VR Laser South Africa’s work at Denel includes the steel cutting and fabrication contract on Project Hoefyster, which is said was awarded before the current board took office.

The project is for 238 Badger Infantry Combat vehicles and was awarded to Denel in November 2013, City Press reported.

The board confirmed the total value of the project is R12.7 billion.

VR Laser's steel fabrication and cutting component make up R400 million of the amount, Denel said.

City Press reported VR Laser registered a “controversial joint venture with Denel Asia in Hong Kong” in January.

Denel said it has established “many cross-border companies and concluded partnerships with foreign entities before” and these partnerships contributed to its “successful business turnaround and sustainability of the company evidenced by an order book of more than R20 billion”.

Finance Minister, Pravin Gordhan, reportedly found that Denel’s “partnership” with the Guptas was illegal as the agreement did not have the approval of the Treasury.

The board said Denel executives are “in ongoing contact with National Treasury clarifying Denel’s legal compliance in establishing Denel Asia”.

-News24.com