The company stated that its woes were due to declining local defence budgets, weakened relationships with key customers and suppliers, the inability to retain or attract skilled personnel, ongoing salary disputes and a Fitch ratings downgrade.

[11][12][13] The Zondo Commission placed the blame specifically on the 2015 board of directors, who almost immediately after their appointment started to implement a slew of poor decisions which brought Denel to its knees.

[15][16] The deal was controversial due to the generous terms of the contract and because VR Laser was owned by the Gupta family which had close ties to then South African president Jacob Zuma.

[19] In March 2019 Denel representatives gave testimony to the Zondo Commission about the company's deal with the Gupta owned VR Laser.

[22] The state owned company's financial troubles continued into 2021, when in April Denel Land Systems stopped paying its employees their salaries.

[23] Union UASA started legal proceedings in 2020 to recoup its members' salaries, while Solidarity achieved a victory in the Johannesburg Labour Court in February 2022, when Denel was ordered to pay out R90 million by March 8.

[22] Finance Minister Enoch Godongwana announced in his 2022 budget address that the National Treasury had assigned Denel R3 billion in bailouts for the 2021/22 financial year.