DTI appoints EconoBEE CEO to task team
The Department of Trade and Industry (DTI) has appointed advisory firm EconoBEE CEO Keith Levenstein to its task team to examine and report on broad-based black economic-empowerment (BBBEE) schemes.
The task team was established as a consequence of the controversy around ownership notices issued by Trade and Industry Minister Dr Rob Davies in May.
Levenstein said there had been concern about employee share option participation schemes and broad-based schemes for some time now.
“There is nothing essentially wrong with broad-based schemes. However, some have been designed in a way that displays no real ownership. What many people forgot is that a broad-based scheme is firstly an ownership scheme and secondly a broad-based scheme. In some cases companies set up broad-based schemes with no ownership, but they were awarded points. This was wrong.
“With no actual ownership accruing to the beneficiaries, the scheme has more of the characteristics of a socioeconomic development initiative than ownership. Imagine spending a small amount of money on a genuinely good cause, but calling it ownership. This is what is happening,” Levenstein noted.
He added that some of the good BEE ownership schemes included telecommunications firm MTN's Zakhele scheme, which also had the characteristics of a broad-based scheme.
“The shareholders bought their shares, took the risk and benefited hugely. Nedbank, long ago, announced its employee ownership scheme, also to the benefit of all.”
“BBBEE remains broad-based: the five elements cover aspects of the business, society and the economy. Even within ownership, the codes encourage a broad-based approach.
“The driver is how points are awarded. Additional points are awarded for black women, not only men. The points encourage involvement of younger entrepreneurs (under 35 years old) and new entrants to the field of investments. A standard ownership deal does not earn as many points as one that properly involves employees, or the broad-based community,” he highlighted.
“We've been concerned about some of these schemes since 2007. It should not have taken so long to start investigating it. Some companies have been awarded ownership recognition points for the past seven years on a dodgy scheme, when it should have been denied upfront.”
“The codes aren’t wrong, they are clear. These strange practices are not supported by the codes. However, the lack of guidelines and lack of policing of verifications by the regulators has enabled this to develop,” he said.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation