Half the companies listed on the JSE have less than 25% black ownership and only 2% are 100% black owned, according to the B-BBEE Commission’s annual report .
The JSE’s failure to assist transformation has impacted on the economy and contributed to gross inequality.
No longer can the JSE sit in its ivory tower while South Africans beg for bread and the working class find it increasingly difficult to survive.
In 2018, the government expressed disappointment with its track record of transforming the country after a World Bank report showed that inequality has deepened since the dawn of democracy, with the country being the most unequal society in the world.
The World Bank’s Dr Paul Noumba Um said more than 75% of South Africans slipped into poverty at least once between 2008 and 2015.
By gatekeeping the industry against the entry of black business and small-to-medium-sized enterprises, the JSE contributed to unemployment. There are thousands of black business persons who resort to small and often non-taxpaying businesses.
In 2015, after former president Jacob Zuma said black ownership in the Top 100 was 3%, the JSE said it was at least 23%.
But Zuma’s figures were defended as being accurate. The JSE then backtracked and agreed with Zuma’s statistics, saying that it generally concurred that direct black South African investments listed was 3%, but when the values of direct and indirect holdings were included, the figure was 23%.
The JSE stopped publishing information on the breakdown of ownership on the Top 100 companies listed.
While we should ask ourselves what the JSE is hiding, monopolistic firms are investing less into the economy and are using the power of capital to inform government decisions.
The compromises reached in 1994 reflected the strength of established business groups, while the JSE did little to diversify the stock market.
In September 2017, the National Treasury said the structure of company ownership reflected important aspects of the economy, linking to policy priorities on transformation and inclusive growth, macroeconomic and financial stability, and competition, adding that listed companies were expected to have diverse ownership although many would also have one or more strategic shareholders with influence in the company. Its report looks at four areas of ownership including BEE ownership.
Ownership is one of five elements of the generic B-BBEE scorecard for companies doing business in South Africa and is an important feature of the sector-specific codes.
While much effort is made to convince South Africans that the JSE does not protect the interests of white business, the statistics show a different story. Post-25 years of democracy our society finds itself in an economic quagmire managed by big public relations companies and a government that will accept failure
* Dr Sihle Sibiya is the chairperson of Insika Economic Movement. He holds an Phd from the Durban University of Technology.
** The views expressed here are not necessarily those of Independent Media.