It's the 31st of March 2017. zuma has fired Pravin and we wait and see what happens now. zuma's radical economic transformation policy has exactly nothing to do with empowerment. It's about gupta crony capitalism. Why then should you concern yourself with an empowerment process that rampant racists like jungle jim (manyi) will discount as either fronting or white monopolist expedience. I'm not discounting the necessity of empowerment, what I am saying is that it is not endorsed by the zuma regime, a regime that now operates entirely independent of the anc (the party will be written in uppercase when they show a little balls). Back to empowerment - South Africa cannot afford not to empower the disempowered. It is an economic and social necessity, but until government (under zuma) plays its role as a partner in this process I will advocate compliance over empowerment. Tread water with me here.
Compliance differs to empowerment in intention. Empowerment requires an intention to make a difference, it's more hands on and probably more meaningful. Compliance is a measurement process. It's squeezing the maximum number of points out of the least amount of money. It's selfish in nature but does produce results and ultimately does contribute to empowerment. It's not as easy as mere compliance, bolshie bob's revised codes have made a gallant attempt to push empowerment. The SANAS verification process is both onerous and thorough (for now) which makes compliance a little more difficult. But in our favour, the codes (all of them) are so badly written that it comes down to interpretation. Just make sure that you know what you are doing and have your justifications ready.
Interpretation
When interpreting the codes you must never lose sight of the founding principles. There are a number of them but these are the significant ones.
BEE codes
- substance takes precedence over legal form. The fronting clause. It refers specifically to ownership but has a broader application. This clause permits those who doubt to dig deeper than the legal structure of a deal. Classic (and patently stupid) fronting puts an unsuspecting person on the shareholders' list or as a director. That's the legal status - the substance states that this person is not that in fact. However there is a converse. Let's say you do your 51% deal and you sign the shareholders' agreement, create the trust, or even sign a MOU; but it takes CIPRO months to reflect these changes. The substance of the deal is that it exists - the legal form has not happened yet.
- any reasonable interpretation (of the codes) must be consistent with the objectives of the Act and the B-BBEE Strategy. Note the words "reasonable interpretation" this is a subjective measure. SANAS or the verification agency might not agree but must entertain that interpretation if it is consistent with the Act and Strategy
BEE Act
The act lists its goals (amongst numerous others) as
- promoting economic transformation for meaningful black participation;
- substantial change in the racial composition of ownership, management structures, skilled occupations
BEE Strategy
This is a really good document that predates the Act. The dti refer to it often but it's not easy to find. So I've posted it here. My good friend Chris van Wyk tells me that it's not an official document even though it's referred to often. Perhaps Chris can explain that in more detail.
- BEE is broad-based.
- BEE is an inclusive process.
- BEE is associated with good governance.
- BEE is part of our growth strategy
Notice the second principle. It's inclusive. Not according to bolshie bob and his crafty crew of drafters. You see empowerment is a white problem - not your problem if you are black and turn over less than R50m. I've said this before. I wonder if jungle knows that white monopoly capital is being made to pay for everything as well.
The next post will discuss the modified flow through principle and how you get to 51% black ownership without actually doing it.
By the way, this is what I am wearing today