Relief as dti back-tracks on BBBEE amendment

Business has heaved a collective sigh of relief after government back-tracked on one of its BBBEE amended codes of good practice. This after it received a huge amount of bad press internationally and locally. The contentious paragraph, Charmaine Venter, director of Diversity BBBEE, told FTW, appeared on May 6, when the department of trade and industry (dti) gazetted a notice of clarification about the amended codes of good practice. This paragraph 1 (d) stated: “Black participants in broad-based ownership schemes and employee ownership participation programmes holding rights of ownership in a measured entity must only score points under paragraph 2.2.3 under the ownership scorecard.” This, according to Venter, meant that broad-based ownership schemes and employee participation schemes could no longer provide voting rights under the ownership scorecard. “This,” she added, “would have had a huge impact on companies that had these types of equity structures in place. “The impact of this was that a company would only earn a maximum of three points on the scorecard, would not meet the priority provision, and could possibly have been discounted one level on the scorecard.” And that last point Venter described as “very concerning indeed”. But loud complaints about the sheer inequity of this paragraph seem to have had the desired effect. “Subsequent to this,” said Venter, “minister Rob Davies publicly announced in an interview on 702 that the dti would retract the announcement. This new announcement was gazetted on May 15 (Gazette 38799) where the contradictory paragraph was deleted. “Now we can all continue with our business as usual.” INSERT The amendment meant that broadbased ownership schemes and employee participation schemes could no longer provide voting rights under the ownership scorecard. – Charmaine Venter