Here’s a piece of news that will send a few shivers down the spines of businesses around the country – the Department of Trade and Industry have made some tweaks to the black economic empowerment (BEE) scorecard and it could have far-reaching ramifications.
Now the announcement from the department came as a shock, with the news coming via an unexpected ‘clarification notice’. Here’s BD Live:
…broad-based empowerment and employee share ownership schemes will no longer count as much as individual share ownership on the black economic empowerment (BEE) scorecard.
…[it] will substantially alter the ratings of companies that have placed a portion of their ownership in the hands of employees or community organisations.
The new codes of practice were due to come into effect at the beginning of this month but many business owners, lawyers and verification agencies were unsure as to exactly how the changes would be implemented. Here’s a few of those verification agencies freaking out:
Keith Levenstein, CEO of empowerment verification agency Econoserve said it would affect hundreds if not thousands of broad-based schemes.
“It is going to instantly drop these companies on the scorecard by as much as 20 points and imply they do not meet the element of ownership,” he said.
Empowerdex described the news as a “big shocker” and Mazar’s managing partner Tony Balshaw called it “devastating”.
“A significant number of nonlisted multinationals and large-and medium-sized enterprises have done empowerment deals based on employee or broad ownership schemes. The effect on them could be to drop at least three ratings levels of the eight,” said Mr Balshaw.
The Chief director of the Department of Trade and Industry, Takalani Tambani, said the changes are aimed at ensuing ownership by black individuals is given greater priority with meaningful participation in the core of the economy.
Cue hundred of naysayers in comments sections around the country threatening to pack their bags and head for the promised land of Australia.
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