Riding the slow train to change | Citypress

However, these experts have spent years grappling with the measurement and methodology of that pillar, whose miscalculations have led to fronting, misrepresentation and intermediaries taking advantage of the transformation agenda.

“This is impossible and absurd, considering that there isn’t a single black-owned company among the JSE Top 100,” said Gqubule. Broad-Based BEE commissioner Zodwa Ntuli expressed similar frustration during the second of the commission’s webinar series – 2018/19 Major Broad-Based BEE Transactions Analysis Report: A Focus on Black Ownership – on Wednesday. The webinar followed the July release of the 2018/19 National Status and Trends report on broad-based BEE.

The 2018/19 National Status and Trends report on broad-based BEE was based on compliance reports from 150 JSE-listed entities and 43 organs of state, as well as public entities. Gqubule explained the discrepancies as follows: “First, unlike the broad-based BEE codes, the Financial Sector Charter [FSC] allows companies to add direct and indirect black ownership within pension and provident funds,” he said.“They can recognise black ownership after the exit of black shareholders. Such concessions enable actual black ownership of 1.3% to become 37.6%, according to a broad-based BEE scorecard,” said Gqubule.

“For instance, the reduced voting rights can be linked to the fact that most deals are vendor-financed, with parties often inclined to include pledges, options and dividend restrictions that unduly restrict ownership rights. She added that vendor financing remained the dominant method of funding in these transactions, with a notable rise in share-swaps. “Given challenges raised with regard to voting rights and management control, there’s a need for intense monitoring of ownership transactions at conclusion and implementation levels.”

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