By Sanjeev “Mahatma” Gupta
Questions still linger on the impending changes to the BEE score card even after Minister of Trade and Industry, Robbie Davies, attempted to shed more light (or some of it) during his interview with popular talk radio, 702. During the interview, he clarified that the replacement of Broad-Based Black Empowerment (B-BBEE) for 25% individual ownership on companies score card is meant to ensure that black owners become active shareholders, not passive shareholders they have become under through B-BBEE.
Even before the one finishes saying “25% individual ownership”, flaws in the new change emerges. Palpably, it is in conflict with what constitutes a controlling stake in a company, according to the Companies Act and corporate governance regulations. For argument’s sake, in most JSE listed companies, a controlling stake means more than 50% shareholding. So, 25% won’t really ensure a controlling stake. Therein lies the pickle.
Conflicting statements on BEE are not helping anyone, not least the intended beneficiaries (the historically disadvantaged). Apparently, the more new statements are made, the more everyone is confused. And so, government has to clarify its stance.
Sanjeev “Mahatma” Gupta is a freelancer operating from Chatsworth in Kwazulu Natal. He is passionate about BEE
2 Responses
Good that the DTI has come to its senses.
Good that the DTI has come to its senses. The decision was as anti-investor as one could get.