Let's say that you are the boss of the dti. You are informed by a small group of very politically connected people who purport to be businessmen but are either rent boys or professional blacks, that the BEE codes of your predecessor aren't cutting the mustard and that they need to be refined to "bring more black people into the economy". You agree because you are a dogmatic communist with very little experience in promoting trade and industry and even less desire to do so. So you go ahead and publish a system that only white companies have to implement which then allows the same black connected rent boys to pilfer liberally from the state coffers all in the name of wabenzi empowerment. You publish the most unintelligible rubbish and set an implementation date that springs suddenly upon you 18 months later. D-day arrives and not only have you been caught with your pants down but you've soiled your underwear so you can't pull your pants up. To save face you put out this notice that is a tacit acknowledgement that your codes are rubbish, unintelligible and incomplete whilst still placating the rent boys. Your solution, which is actually rather clever, is to allow companies to use the old codes if their financial period ends before the 30th of April (because useless and thick commies fully understand that financial years typically end on the second last day of a given month) or use the new codes. You know, as an incompetent government minister who is surrounded by like-minded minions, that no company will use the new codes because they don't want to and don't understand them, but the black-owned businesses that the rent boys own will use them because they are a level 1 without contributing anything to nation building. Neat job Rob, even I am impressed.
However, somehow you allow one of your muppets (no names offered) to insert the following line into your "clarification notice"
Black participants in Broad-Based Ownership Schemes and Employee Share Ownership Programmes holding rights of Ownership in a Measured Entity must only score points under paragraph 2.2.3 under the Ownership scorecard.
The world comes to a shuddering halt. What the fuck does this line mean and what does it refer to? Paragraph 2.2.3 appears in both the original and revised codes. The section deals with economic interest for
- black designated groups:
- black Participants in Employee Ownership Schemes:
- black beneficiaries of Broad based Ownership schemes: or
- black Participants in Co-operatives
Ah yes, vagueness all over again. You could take the line that Transcend has (which I think most people would follow)
The clarification notice effectively limits BEE ownership recognition via BBOS and ESOPs, and reduces the number of BEE ownership points that can be earned by BBOS and ESOPs to only 3 points out of the available 25 points. This change removes any significant benefit of including employees, communities, or foundations in the Black ownership structures. The majority of BEE ownership transactions involve BBOS and ESOPs. Accordingly, the consequences of the change is that most companies will see a significant reduction in their B-BBEE ownership points, and in terms of the Amended Codes of Good Practice, some companies may fall below the Net Value sub-minimum and accordingly drop a B-BBEE status level. In addition, some of the largest, established Black broad-based ownership schemes that have either union members, or black community projects as shareholders, will receive limited Black ownership recognition.
Or you could perhaps look at the paragraph again and view it this way. BBOS (broad-based etc) and ESOPs (Employee share etc) must only score points under 2.2.3. In other words the black designated groups and co-operatives may not score under that section. The paragraph does not EXPRESSLY preclude these types of schemes for scoring points under general voting rights and economic interest. Think in term of a bicycle lane next to a road. The sign will tell you that only bicycles may ride on that lane, but this does not EXPRESSLY prevent bicycles from riding on the road as well.
So we now have the usual dti ambiguity which is further compounded by the fact that this paragraph might also refer to the revised and original codes. Cynics would argue that the muppet has been brow-beaten by the black rent boys and industrialists to ensure that they get the deals and hence the Transcend interpretation is correct. However we need to remember that Lionel and TFB Mestywa were quite adamant the revised codes were going to be more broad-based, and that the concept is called BROAD-BASED BEE. This little paragraph might be a valiant attempt to Zungurise the economy but it will upset a lot of companies who have historically done massive community-type deals. Think of the mines and the Royal Bafokeng, SASOL, SAB, all of the financial houses. I'm not expecting a retraction – at best we'll get a …………………………. and have to figure it out for ourselves.
My advice – ignore it. It's not clear enough to be understood and you cannot just negate an established business practice with a poorly drafted paragraph. Perhaps SANAS will attempt to enforce it (I don't know if you heard that SANAS issued a notice on Monday to its agencies that their accreditation was now only applicable to the revised codes), but IRBA is unlikely to. We can expect more SANAS agencies moving across to IRBA because you can't trust a department run by a useless commie. The muppet should be sent back to Sesame Street.
If they attempt to enforce it then we will go to court. A country cannot be expected to function under these circumstances, and it's about time that this country realised this.
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