Paul Janisch

Measurement of ownership – when?

Is there anything good in the world of BEE at all. No, not much. All that is good is forgotten about and all this is bad is used by both the minister and the advisory council to entrench racial polarisation. But I digress. The issue here is when do you measure ownership? Is it ownership that existed during the measurement period, or is it on the date of measurement. Something as critical as this is not discussed in the codes and Vuyo's labour of love doesn't appear to discuss this either. This is what EmpowerFlex thinks

A Bee verification is mostly or in terms of the monetary elements skills, procurement, enterprise development and socio-economic development based on your previous financial period. As for ownership, management and employment equity it is measured as at present or as close to present as possible.

The above is so as the verification manual along with SANAS requires verification agencies to conduct an interview for example with a shareholder in his/her capacity as a shareholder. If this interview is not possible or the person is no longer a shareholder and can therefore not conduct such an interview in his/her capacity as a shareholder then no points may be allocated.

The two underlined paragraphs are significant because there is no written documentation that confirms this. Yes there is the verification manual (which IRBA seems to disregard). The bit about the shareholder in their capacity as a shareholder is not date-stamped. All that paragraph 7.1.6 of the ownership part of the manual says is

Interview a sample of black shareholders whether they understand their voting rights and whether they have exercised such voting rights independently.

This does not mean that they have to have been shareholders on the date of verification. It means that whilst they were shareholders they understood their rights. You can't take the piss here and say "well JZ was a shareholder three years ago so let's interview him". The shareholder must have been a shareholder during the period we are measuring. The next mystery is how much of the period did they need to be shareholders for? I believe my good friend Gerhardus has an answer which goes along the lines of you prorate the points according to the period they had shareholding – which is fair. The calculation would be, shareholders exited after six months of the year, their shareholding would have contributed 20 points so your calculation comes up with a score that is 50% of the 20 points. But again this is not documented so a practise needs to arise that establishes this as acceptable.

I have been told that SANAS will allow you to consider ownership if it ended about a month before the verification, this in itself is arbitrary – why not any time less than 12 months?

It's very clear that the verification manual does not prescribe when the ownership needs to exist but I believe that the real problem lies with SANAS who have now decreed that this is how it's going to work, but the decree does not exist in writing. This is unfair – if this process exists and is prescribed by an organ of state like SANAS then these procedures and prescriptions must be made available and not arbitrarily imposed. The legality of this is dubious.

Let's go back to management and employment equity as per EmpowerSex. Why should those be measured as close to the verification date as possible? The verification requires agencies to consult the company's EEA2 and the COR documents – which are typically historical document. Yes it does say that interviews need to be conducted but that's almost in conflict with the EEA2 requirement. Also a verification agency will check the payroll which is determined on the measurement period , not on the date of verification. The only document that I can find that might help us here is the Interpretive Guide to the Codes of Good Practice which says on page 56 (referring to management)

this employee will not be accounted for under the measured enterprise's employment equity element for the year under measurement

Is this not VERY clear that we are talking about a measurement period and that we measure the performance under that year. Can you imagine if an auditor decided to not consider the profit for a financial year but chose to use the figure that existed on the date of the audit. It's as ridiculous as that.

Whilst I don't agree with EmpowerRedNex I would appreciate a uniform measurement regime which will allow all of us that are subject to the codes a little certainty when it comes to determining our BEE status.

Complex BEE fronting as per Sipho Ngcobo

Both BEE partners (black and white) have something to gain and it’s well known to both of them – the white partner wants the lion’s share of “the honey” and the black partner also wants something for purposes of expediency. So, both partners have colluded. In this case it would be challenging to get to the bottom of the truth.

via www.moneyweb.co.za

You give Rob and the useless BEE Council too much credit Sipho. There is no way that are vaguely sure of this kind of stuff - they just think it happens. At least you recognise that it's not only the naughty white people who might front.

Changing face of BEE deals, which are few and far between

The nature of empowerment deals has changed in the last few years, MD Samara Totaram told investors at PSG’s recent AGM. “Early deals were fully vendor funded, with big discounts and long lock-ins. This has changed and today companies expect BEE shareholders to put skin in the game.”

Another trend in BEE deal-making is the move away from black investment companies and towards employee trusts. “This notion of once empowered always empowered is a misnomer,” she says.

This means that companies whose empowerment deals are unwinding – as in the case of Absa’s Batho Bonke deal – are stuck in an awkward position. “They could choose not to do another deal, but then their BEE ownership credentials will fall. They could do another deal – but what company wants to fund a new BEE deal every seven years? Or they could create a trust for staff that exists in perpetuity. This is the option we think many companies will choose.”

via moneyweb.co.za

Enough of the Zuma-bashing for now.  This is useful to know, I can see the trust lawyers rubbing their hands in anticipation.

 

 

Leadership please, Mr President - BDlive

There is no one big thing Zuma or anyone can do to put South Africa on a prosperous path. But there are two things that will make an immediate and material difference to international sentiment and serve at least to arrest the slide: implement the sensible youth wage policy and ease South Africa’s rigid labour market to make it less pro-labour and anti-business. Such moves would be a display of the sort of leadership Marcus was calling for.

Unfortunately, all Zuma has shown so far is that, no matter what he says in public, Cosatu’s wish is his command.

via www.bdlive.co.za

Oh yes I forgot to mention in my last post that the Rand tanked when he opened his month. My god - what a fiasco.

Not leadership, just vacate the position and give it to someone with at least a standard 5.

ANC: Kunene a desperate, loose cannon but Zuma is not?

The ANC has accused businessman Kenny Kunene of using cheap publicity stunts to further his "questionable" political ambitions by hurling insults at ANC leaders.

"It has now become clear that we are dealing with an individual of dubious character, with no political mores or basic decency, intent to harm the African National Congress [ANC] and its leadership with impunity," ANC spokesperson Jackson Mthembu said in a statement on Tuesday night.

via www.news24.com

Who'd have thought that such a dubious character would become the darling of those who thing Zuma is a complete fucking waste of time, chronically embarrassing and less competent than a child with a grade 4 (standard 2 in my day). For those who aren't convinced let's go through a few persuasive arguments.

1. Does anyone remember one Abbey Makoe who was the chairman of the Forum of Black Journalists who invited our fucking useless president (who wasn't a fucking useless president at the time) to address them.  White journalists were evicted from the meeting, on the basis of race and Zoomer was quoted as saying he saw nothing wrong with this.  I blogged about this back then.
2. Children out of wedlock.  This is just embarrassing for the country.  I'm not going to talk about his numerous wives - he's entitled to this under his culture.
3. Lack of leadership
4. Employing the most incompetent ministers pretty much across the board
5. Not appointing permanent people to prominent positions
6. Guptas
7. Nkandla
8. Guptas
9. Family enrichment
10. Yet again not appointing people in the right positions
11. Not firing useless ministers for incompetence
12. Guptas
13. Another child out of wedlock
14. Secrecy Bill
15. Marikana
16. Letting Malema off his leash
17. Angie Motshekga (who apparently is performing fantastically)
18. Having a fucking standard three and thinking he can run the country.  He can't even balance his own bank account for fuck's sake.
19. Having no idea about what goes on in his country.  It's a stock standard response in parliament
20. Dina Pule
21. Rob Davies
22. Tina Joemat- Petterson
23. Arms deal
24. Schabir Shaik
25. Another 354 things that I can't remember

 This is not a polite post, I didn't intend it to be.  I have had enough of Jacob Zuma, as I am sure many South Africans have.  I agree with those who think that a person has to earn respect.  At the outset Zuma has made no attempt to earn the respect of anyone other than those in his inner circle - and so I post this as a sign of total disrespect and humbly beseech the ANC to get rid of this moron and provide us with someone that we actually can respect and take pride in.

 

 

 

 

Timeline for Lottery Operator Tender - call me to help with the BEE part of the bid

This timeline was taken off the National Lotteries Board website. There is not a great deal of time to submit a proposal. I reiterate what I wrote a few days ago – there is a strong emphasis on BEE related issues. Again I offer my services to a bidder to put together a compelling document. I've done a fair number of PPPs in the last few years and know how to go about putting together a proper submission. Email me and I'll happily discuss the document with you.

DATE	ACTIVITY
13.06.2013	The secure Virtual Data Room open to RFP Applicants
27 - 28.06.2013	Compulsory RFP debriefing session Venue: The Venue, Melrose Arch, 17 The High Street, Melrose Arch, Johannesburg Time: 09h00 to 17h00 (both days) RSVP: by no later than close of business on 25 June 2013
31.07.2013	Last date upon which an RFP Document can be acquired
31.08. 2013	Date for submission of the fit and proper details and declaration of interest.
30.11.2013	Submission of applications for the Third National Lottery Licence Venue: National Lotteries Board, Block B, Hatfield Gardens, 333 Grosvenor Street, Hatfield, Pretoria 0083 Time: 10h00
31.05.2014	Evaluation of applications completed.
30.06.2014	Adjudication of applications completed.
31.07.2014	Independent audit of evaluation and audit process completed by independent external auditors
31.08.2014	Announcement of the Successful Applicant by the Minister of Trade & Industry
31.10.2014	Estimated date by which the Draft Licence Agreement has been concluded and signed by the Minister and the Successful Applicant.
1 .10.2014	Commencement of transition and handover period from the current Operator to the New Operator
01.06.2015	Licensee commences operation of the Third National Lottery Licence

FOR FURTHER INFORMATION AND QUERIES:

Telephone: Nwabisa Mabuto +27 12 432 1530

Palesa Motsoeneng +27 12 432 1531

Email: [email protected]

Fax number: +27 86 521 6696

Black Companies In Namibia Seek Licences Without Knowing What It Takes

Many black economic empowerment (BEE) companies in Namibia are applying for exploration licences without a full understanding of what it takes to explore for oil and gas, a top Namcor official says.

via www.bernama.com.my

We can relate here

Companies failing BEE targets, says Davies after being advised by the useless presidential advisory council.

He cited findings from the presidential advisory council on BBBEE, which was established shortly after the new administration under President Jacob Zuma took office.

via www.timeslive.co.za

Herein lies the problem. This useless council does not contain much in the way of entrepreneurship mettle. It's made up of political appointees, corporate people and academics. And there are very few white people in this little band. So what you have is a bunch of people who do not run companies, do not know how to run companies who now tell all those racist whites how racist they are. And this is who our esteemed minister listens to. 

What we need are people who run and own businesses, who understand what it takes to run a business and meet empowerment targets. And yes some of those people do need to be white - because this is empowerment's target market.

Land restitution - considering the emotional practicalities

Two articles appeared in BDLive this morning (and yes there are ways to read this without paying extortionate amounts for the content; as soon as the drop the price to something reasonable I will subscribe).

This paragraph sums up the need for black ownership of farmland

At this point, the landlessness of black people should be the most pressing priority. Land brings dignity and is capital to fund a better education, new businesses and an improved quality of life. We should have solved the restitution question many years ago and redistributed 30% of land to blacks by now. Without it, black lives will continue to suffer indignity and upward mobility will still be largely in the hands of the government.

Written by Sipho Hlongwane on the anniversary of the 1913 Land Act, the article provides a surprisingly objective view of the emotional attachment to land and the indignity of having that land removed from you. Sipho writes

Sol Plaatje famously put it: "Awaking on Friday morning, June 20 1913, the South African native found himself, not actually a slave, but a pariah in the land of his birth." In one fell swoop, the government of the day restricted black land ownership to just 7% of the available land, and later, under the 1936 Native Trust and Land Act of South Africa, that portion was extended to 13% — most of it a collection of "native reserves" that could not possibly support the country's growing black population. The results of this political act were immediately apparent. Blacks were either forced into unsustainable slivers of land or forced to move to white areas where they were ruthlessly exploited as cheap labour.

In this context it is easy to understand the emotional attachment to land. But Hlongwane conveniently omits a vital point that has been accepted by the government.

The government has long assumed a major land hunger among South Africans, which restitution is supposed to help fulfil. However, in April, Rural Development and Land Reform Minister Gugile Nkwinti finally acknowledged that few claimants wanted land, for 93% (about 71,000 out of 76,000) had opted for financial compensation instead. Said Nkwinti: "We thought everybody, when they got a chance to get land, they would jump for it. Now, only 5,856 have opted for land restoration." People wanted money because of poverty and unemployment, but they had also become urbanised and "deculturised" in terms of tilling land. "We no longer have a peasantry; we have wage earners now."

This is taken from the other article in BDLive, written by Anthea Jeffery who is head of special research at the South African Institute of Race Relations. Anthea goes into a fair amount of detail about the pitfalls of the land restitution process and the ramifications of the Restitution of Land Rights Amendment Bill which is now open for comment. Jeffery goes into a few issues that we are likely to experience if the bill goes through. The first one relates to verifying the claim.

According to Theo de Jager, the vice-president of Agri SA, which is the national voice of commercial agriculture, part of the reason is that would-be claimants have realised that claims are no longer being adequately verified. In the past, says De Jager, when people anticipated proper investigation, they hesitated to put in bogus claims. But now that probes are no longer rigorous, lodging land claims has become "a free-for-all, in which the only criterion is a claim form".

The second is purely an economic one, farmers will no longer invest in the land if there is a claim on it. This has a direct impact on food availability.

And finally – taking the lead from Zimbabwe, we need to consider that the ANC might just go for land grabs to retain its dwindling majority

Land reform in Zimbabwe — which Nkwinti was recently at pains to praise — has left virtually all land in the hands of the government, which leases it to people on a "use it or lose it" basis. This has given President Robert Mugabe's administration a powerful instrument of political control. South Africa's ruling party may also want the same for itself as its already declining electoral support withers further in the future.

This is not an easy situation to sort out. There is no doubt that people feel dispossessed but allowing for expropriation below market value could force our people to become refugees in Zimbabwe.

Third Lotto Licence Operator Would Focus On Localisation, Economic Empowerment and Infrastructure Development - if you need help with your submission call me

He also said the Request For Proposal (RFP) document requires applicants to consider and demonstrate how they will leverage the economic benefits of the National Lottery in order to support the development and advancement of the South African Economy.

"The manner in which the new RFP has been put together requires applicants to provide a comprehensive retail distribution network beyond the current extensive footprint and, in particular, to consider expansion to rural and other areas where the National Lottery is currently not available," added Davies.

The RFP document is available to prospective applicants at a non-refundable fee of R50 000 payable by 31 July 2013. The document outlines the requirement to be met in order to be considered to run the National Lottery. The application must be submitted on 30 November 2013 together with a non-refundable application fee of R2.5 million.

via allafrica.com

Seriously - I've had a lot of experience with this type of submission. If you are a bidder and need help on this aspect of the bid, I know what I'm doing.