State-owned arms manufacturer Denel has denied that the R1.1m bursary given to the son of North West premier Supra Mahumapelo was done in contravention of the ailing company's policy.

Denel said bursaries were awarded to three students‚ of which Oarabile Mahumapelo was one‚ based on the same criteria.

"The award was made in compliance with Denel's relevant policy after a full disclosure and presentation to the board of directors of Denel which was noted without any objection‚" Denel said in a statement on Tuesday.

Rapport newspaper reported at the weekend that the state-owned armaments company‚ forced recently to borrow money to pay salaries‚ had "bent the rules" to award the bursary to Mahumapelo. According to the newspaper Denel CEO Zwelakhe Ntshepe personally signed the contract.

Public Enterprises Minister Pravin Gordhan described the allegations as serious and asked the newly appointed Denel board to institute an internal investigation.

Last week‚ Gordhan announced the appointment of an entirely new board for Denel. In March‚ a few days after Gordhan was appointed public enterprises minister‚ Denel board chairman Daniel Mantsha resigned. Mantsha has been implicated in allegations of state capture.