None of us will forget 2020 and it's unlikely that 2021 will be forgotten either. I do take comfort in a few realities
- The ANC is fundamentally incompetent and corrupt and that Cyril cannot bring them into line
- We can be grateful that it's Cyril who is president (but I doubt he's actually in charge). We would have collapsed under that idiot and corrupt primary school dropout zuma
- I am very happy that trump was not my president. He and the 77m people who voted for him have now shown that there is little hope for humanity
This blog was designed to commentate on black economic empowerment. It didn't take long for it to become a vocal critic of the idiots in the dti, now called the dtic. I took great pleasure in noting that that awful commie rob davies (aka bolshie bob) knew about the blog. If that is the case then I am betting that Slaptjips (Patel – still uppercase) will become familiar with it in time, if he hasn't already. I am deluding myself if I think that they will pay much positive attention to what I write – it's not human to look for advice when it is being delivered as a personal criticism. But this voice is required and so it will continue on its bumpy uncharted and potholed coarse.
The object of my ire this year will be SANAS. Or as Frank Zappa used to say in one of his concerts "That's right you heard right. The secret word for tonight is mudshark SANAS." Before I launch into my anti-SANAS diatribe, I need to bash the ever-useless dtic.
Firstly they changed their name for dti to dtic. Many of us who have been forced to look at their amateurish website would have gone to https://www.thedti.gov.za/ to peruse it. Well that link doesn't work. You now need to go to http://www.thedtic.gov.za/ to find it. It's beyond this rather critical department to point the old URL to the new one. How hard would that be Slaptjips? On top of this the new site is no longer secure – perhaps the SSL certificate money was given to a contractor to deliver something that they ultimately didn't (as per the National Lottery's unofficial mandate). On the positive side it's a much better website than the last one even though it could be improved substantially. I can recommend a very good website development company if they want to get it to actually work.
The dtic is entrusted with the creation of policy, specifically empowerment policies. You would think the dtic (iDiTioC more like) are aware that we are in (hopefully not the beginning of) a pandemic. We have seen massive job losses, those companies that haven't gone under are either still pilfering from the state or they have contracted. It stands to reason that that BEE budgets no longer exist, specifically when it comes to skills development.
There is a practice that has been around for years. When you measure skills development you use the annual SDL and then multiply it by 6 (in Standard Bank's case just round it off to the nearest billion). For a number of months SDL payers were given a holiday. This would have reduced the skills development target (that mere mortals can't meet in a boom economy, unless they speak to me about our learnerships). It would have been a small gesture from the dtic if they had said that the skills development target would drop accordingly.
Not our special dtic. We were provided with the following email from Jacques Marnus
From: Jacques Manus <[email protected] >
Sent: Friday, 08 May 2020 15:49
To: Yuneal Padayachy <[email protected] >
Subject: Re: SDL Payment Holiday Payment and Skills Development Leviable Amount
Good day, Yuneal
The definition of leviable amount speaks to total amount of remuneration paid and does not get impacted by the payment holiday granted. Your target thus remains remuneration paid as per the Annual Financial Statements of the Measured Entity.
Regards
This is an email, not a formal policy document. Whilst Jacques is correct, this comes straight from verification manual, it's callous. It's a clear indication that this department is clueless, just a bunch of flunkies who are hamstrung by policy, which is not unlike any bureaucracy in the world. This same message then goes to SANAS. In fact the email to Jacques came from Yuneal Padayachy.
WHICH BRINGS ME ONTO SANAS
I detest SANAS. They have taken the worst of apartheid and re-purposed it to suit their own race-obsessed agenda. I will say that Yuneal is a very amiable guy. He'll take your calls and is very polite, he'll listen but will do nothing. I might be in the minority here, conversations with one or two people in the verification industry show that they don't hold him in the same regard.
I have written about SANAS often. There is a character who works for SANAS, who I euphemistically called Catasrophes, as I wrote at the time
The most notorious of these people is a character whose name should be Catastrophes, we'll call him just that. Catastrophes is in the sunset years of his career as a working person and takes his job very seriously. From my understanding he sows fear in the minds of his 70 odd verification agencies. A non-conformance can result in you losing your licence. But Catastrophes is not your average fear-monger, he's a lot more than that. He's an arbitrary fear monger. A verification agency won't know what arbitrary rule he may invoke at any one time. You would think that if there are gazetted codes and practice notes and you followed those then you'd be in with a fighting chance. Not so with Catastrophes, he may come in and offer non-conformances for not adhering to an OPINION by the bee commissioner; or he may regard a draft code for comment as binding. Perhaps he might refer to the draft verification manual and insist that it be followed. Catastrophes then hands out non-conformances for these transgressions. That the verification agency could never have known that this was a potential transgression is not an issue in Catastrophes' world. You would think that a reasonable person would provide a warning and say if you don't fix this you're in for the high jump next year.
I don't want to expose Dees (oops – did I dud miyeni him). I spoke to Yuneal about Dees. I said he's sows terror in the industry. "That's your opinion," he opined. I then suggested that perhaps they should speak to their verification agencies and find out what the Dees experience is like. The suggestion was heard and rejected. I then said to him, how about you putting up a list of non-conformances on a website so that we as consumers know where the VAs are going wrong so that we can make sure that we don't get hit with a rejection. "No, I don't think so." Yes, but Yuneal, VA1 will accept something that VA2 will not and vice versa. Why – because there is no fucking policy certainty coming from you.
We remain in in the dark and this is all SANAS' fault. Logically if you have legislation then you can read it and know where you've gone right or wrong, if not you can consult a lawyer who would be familiar with case law to point you in the right direction. BEE is not like that, it's guess work and guess work for everyone, except Dees who will penalise a VA for something because he feels like it.
Yuneal is now starting to change policy without the correct mandate. He has decided that the venerable codes need to be elevated to the status of the Companies' Act. In an email addressed to all VAs he attempts to justify why the BEE measurement period needs to be a financial year, this is in spite of the fact that the codes do not prescribe this.
He writes
In 'Criteria for Verification Engagement' the 2008 Verification Manual expressly provides for 'any other legislation or regulation as provided for in the Codes' to be used as criteria when evaluating the Measured Entity. The Companies Act is referenced in the Codes, as such the definition of 'financial statements' found in the primary legislation finds application. It defines financial statements as:
Includes –
- Annual financial statements and provisional annual financial statements;
- Interim or preliminary reports;
- Group and consolidated financial statements in the case of a group of companies; and
- Financial information in a circular, prospectus or provisional announcement of results, that an actual or prospective creditor or holder of the company's securities, or the Commission, Panel or other regulatory authority may reasonably be expected to rely on.
Here he takes a reference to the Companies Act in the BEE codes as implying that this becomes the method to determine a measurement period. The term "Companies Act" is mentioned about four times in the codes. The first one talks about the definition of a company under ownership (code 100), it then appears again in the definitions. There is no link to the Companies Act when it comes to a measurement period. And if the Companies Act did refer to such a period then surely it would be under Statement 000 – General principles. This is very tenuous, deceptive and illogical. The codes also make reference to a wide variety of acts that aren't vaguely linked to BEE measurement – things like Medical Schemes Act, the Pension Fund Act, the Friendly Societies Act and my favourite THE MILITARY VETERANS ACT (which applies to me and the 700 000 odd white people that went through conscription). How would these Acts then impact on the codes?
But Yuneal was on a roll (or perhaps playing a role). He must have realised that his deception was taking on a trumpian life of its own. He refers to the gazetted verification manual from 2008 (not the one from 2015 which remains un-gazetted that does require you to use a financial year).
Section 10.1.3 of the 2008 Verification Manual reads as follows: 'In order to determine if the Measured Entity is classified correctly the Verification Agency shall obtain the audited financial statements and agree the amount recognised as Revenue to the thresholds set by the Codes.' While this references thresholds as opposed to 'measurement period', an interpretation which divorces the classification of measured entities from the measurement period is absurd as such would violate several principles of the Verification Manual
I'm not going to go into the justification he uses below this paragraph, you can ask him. I am hoping that the reader (which is probably my mother, my wife stopped reading this years ago) sees the continuing deception and absurdity of this statement. The deception lies in the term thresholds, which Yuneal recognises. He tries to show that the term "thresholds" extends to the measurement period because the vibe of the Manual says that we really should sort of but in fact use a financial year. This is esoteric and holds no water.
The absurdity in the underlined sentence says that you need to use the audited financial statements to determine where you sit on the scorecard. If you consider that it can take up to a year to get your financials audited you may find that the turnover of that period is a QSE but the period that you choose to use falls over that threshold, then you're a QSE. Yuneal doesn't have a problem with you using non-audited financials as long as they are from the financial period. Absurd
WHAT'S THE UPSHOT?
This notification has gone to all the verification agencies who are petrified of Dees. I know of some who have actually read it and their policy is that if the codes intended us to use a financial period then the dtic must either put out an amendment to that effect. An amendment needs to follow due process, which will require comments that will be ignored. However Yuneal's opinion has sparked fear in a number of VAs who now will only use a financial year, why because Dees will have a shit fit and take their licence away.
And for this reason amongst myriad others, SANAS needs to be more transparent and fair. They need to send Dees to the nearest retirement village and get someone who is not hell bent on scuppering the whole process. Unfortunately Yuneal is too much of a nice guy to drive this change.