Why we should be overjoyed that ABSA may lose some of its BEE shareholding

There's been a bit of press about this, mostly about the fact that Tokyo wants to sell out via Mvelaphanda Holdings' 40% interest in Batho Bonke. Batho Bonke owns about 4% of ABSA. This is a joyous thing, a mitzvah, a blessing, a wonderful occurrence and other superlatives. Besides raising cash for Tokyo's campaign to remove the useless showerhead (although everyone I have spoken to says that Tokyo might outdoos Zuma in the doos stakes) it will apparently give about 1.2 million people a little bit of cash. And this is what the empowerment thing is about.

But alas it will have an impact on ABSA's BEE score. I think the worst that will happen is that ABSA will lose about 3 points which will drop them to a level 4. ABSA is the first to lose some shareholding; at some stage all the big banks will drop their shareholding and are unlikely to do another deal – they'd be bloody stupid if they did. This will level everything and then when you take the FSC's once empowered principle into account, the ownership scores will remain consistent.

But this is so irrelevant – what matters is that ABSA has done something for a lot of people. ABSA should be singing from the rooftops about this, they'll be the first to do so. They should go on a feelgood marketing campaign showing the poor people who have benefited (I wouldn't mention Tokyo – we all know that that he doesn't need the cash). They should use this as a starting point to provide banking services to the beneficiaries, throw a little ED money into the programme to teach these people to start creating their own businesses, co-ops etc. But whatever they do they must ignore the narrow-minded HBR (Hola Bon Renaissance) Foundation. The Sowetan reports that

HBR wants the government to acquire the shares through any of the public-owned financial entities, including the Public Investment Commission, the Industrial Development Corporation and the National Empowerment Fund and "warehouse them until another BEE consortium interested in investing in the banking sector is identified".

Everyone should ignore the HBR – this narrow-minded perception of black ownership can never create wealth, it will only bankrupt an already corrupt government.

Well done in advance ABSA, Maria give me a call if you want me to help you with this long term ED and marketing campaign.

Comments

[Richard Ferrer]

The type of empowerment that creates long term economic growth is about genuine empowerment of the broad cross section of society: Education, training, the right environment for job creation, teaching business, law and order, stamping out corruption, etc. Let all who agree take this message far and wide and vote in politicians who will do this.
Yes, ABSA has indeed contributed meaningfully. Well done!