http://bit.ly/cnM6rr JSE moots BEE board. The JSE is planning to start a separate board for BEE companies. Will cater for the rule that beneficiaries are only allowed to sell their stakes to other black people.
I think they should do it

Comments

[Mark]

is there enough capital in the hands of black folks to make this board viable - I mean, if trade doesn't happen, nothing goes nowhere? The key would be capital avcailability becuase if that comes from the banks etc then basically you're shifting the goalposts and nothing really changes does it?

[Paul Janisch]

I think that is an extremely valid comment Mark. The answer as to whether only black people participating in it makes it viable, to my mind is irrelevant. What it is doing is limiting the potential market for the shares and in so doing potentially reducing the desired outcome of wealth creation. It makes Pine Pienaar’s comments (http://bbbee.typepad.com/paul_janisch/2009/08/mine-as-oliver-is-wont-to-say.html) on the Mining Charter more pertinent.

I think they should go ahead with this board because it will show the folly of the "only selling to black people rule". And if this rule is then removed it could be a great endorsement of black businesses if a wide variety of private and institutional investors put their money into these businesses.

[Mark]

agreed. Where B-BBEE has taken a wrong turn in my view, and I speak as a black person, is it has become exclusive. We should have worked very hard to make the process as inclusive and as close to business as possible. In other words, ensure there are rewards not punishments, for everyone to contribute. I believe that people will act in their self-interest, and if people could see the benefits to themselves of B-BBEE, they would act. So, have a Board if you want, but open the trade of shares to all and if they're good enough companies, demand will outstrip sales, push the price higher and B-BBEE will have been served. If short-sighted people want to sell, so be it - that's how the markets work.