Change the BEE rules - Cyril Ramaphosa

[Dave A]

Whilst I suspect Cyril is looking for the opportunity to cash his stakes, this report is startling evidence of the fundamental flaws in the BEE strategy....

Bidvest chairperson (and senior ANC NEC member) Cyril Ramaphosa used the opportunity to call for the revision of BEE laws and said companies should not be stripped of empowerment credits when BEE partners sold their investments in those companies.

Said Ramaphosa: "They should be allowed to keep their credits (earned for concluding BEE deals) because they did something for the empowerment of the previously disadvantaged, which is what BEE is about."

Ramaphosa said the current establishment in which BEE investors are locked in for long periods is not real transformation as it does not transfer wealth.

"We (black business people) are laden with debt even though we are millionaires on paper. If we are allowed to exercise and take profits, the money could be used to create more wealth."
full story from FIN24 here

[duncan drennan]

There is an article on the M&G about "Mister BEE" - Martin Kingston, with this interesting piece,

Because empowerment partners often lack ready cash, most deals are financed by debt. And the banks who act as advisers and financiers rake in huge sums. In the BEE landscape, Kingston knows when to call and how to deal. He’s successfully built bridges between established business and the new elite. In short, he’s Mr BEE.

Full story on M&G

So combine this with Cyril's comments and it would look like it is the intermediaries who are making all the money. For the new "elite" they hold big paper assets, big liabilities, and probably cash flow issues (unfortunately shares don't typically put money in your pocket month on month).

So it begs the question of who really is getting empowered.