Solidarity published a study that found
Black ownership on the JSE was at 23,8% in 2008, compared to the nearly 5% in 1993. Further, Solidarity expected that ownership would increase to as much as 34% by 2012.
The DTI weren't happy with this finding (predictably, neither was the largely irrelevant BMF).
DTI BEE director Nomonde Mesatywa said that the it appeared that the survey only focused on measuring indirect ownership through pension funds, medical schemes and insurance polices.
In addition, she said that unlike the finding of Solidarity, government had agreed on a 40% benchmark in terms of measuring indirect ownership.
"In relation to the Solidarity findings of 23,8% it is still far below the 40% mark.
"Further, the actual direct ownership in the JSE listed companies is still encumbered, therefore it is premature to suggest that the implementation of BEE has contributed more to the development and promotion of a black middleclass than is recognised," she commented.
It's not a bad statement, in fact I recommend you read it anyway because it shows the Nomonde is no slouch when it comes to understanding broad-based BEE. In fact, well Nomonde this was a very well balanced view and very nice to read.
It's this of encumbered wealth that worries me – everyone I know (except for my wealthy banker mate) has encumbered wealth. My house is encumbered, my car is encumbered, the amplifier I bought last month is encumbered. It takes encumberment to generate wealth. And this is the fatal flaw in the DTI's empowerment plan. This flaw is made up of two components
- Wealth is only accumulated when the encumberment has passed. True but the fact that this person has access to these assets and allows them to sell them at a profit even if they are encumbered means that they will generate some cash (as per Mzi).
- Empowerment is measured in terms of black representation and not value created by black people. This representation is so stupid. They should allow people to get in, make money and get out. It is getting so ridiculous now that the JSE is going to set up a separate board for these shares.
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