Briefing Parliament's standing committee on public accounts (Scopa) on Denel's annual report, chief executive Talib Sadik said yesterday that the proposed five-year contract for Augusta Westland to make A109 helicopters for African clients had been rejected by the boards of Denel Saab Aerostructures (DSA) and Armscor.
Sadik said the DSA board believed the contract posed "technical challenges", although the company was making parts for that model helicopter.
He said its underlying condition - dropping a R90m damages claim against Augusta Westland for being behind on industrial participation obligations stemming from South Africa's multibillion-rand arms acquisition programme - would not have benefited the balance sheet.
"We believed it could have triggered a finding of wasteful expenditure against us," he said.
Kingly, who was brought in to turn around DSA, and Methola disagreed.
Sadik said the disputed contract was not the only reason for Kingly's resignation, another possibly being that it was hard to work for a loss-making entity.
He assured Scopa there was no question of a golden handshake for them.
The annual report revealed that DSA was responsible for 80 percent of the losses that left Denel R544m in the red last year.
Sadik's confirmation that the deal was given the thumbs down by the Armscor board casts new light on the dispute between the arms procurement company and former chief executive officer Sipho Thomo, who was sacked last month.
One of the charges against Thomo was reportedly bypassing the board and giving Augusta Westland an expectation that the R90m claim would be revised.
Last month, Thomo asked Armscor to review the decision to dismiss him, but it refused, raising the spectre of his going to court. - Sapa