Only 2% of the companies listed on the JSE are under 100% black ownership
Half the companies listed on the JSE still have less than 25percent black ownership and only 2percent are 100percent black owned.
This was according to the B-BBEE Commission, which released the latest annual report on the national status and trends of broad-based economic empowerment for 2018.
“The outcome of the compliance analysis still shows a (slow) pace in transformation with priority elements being barely achieved,” the report noted.
Some 46 percent of listed entities have more than 25 percent black control, but less than 100 percent control, the report said.
Meanwhile, only 43 percent (51 percent in 2017) of listed companies, and only one in 10 (1 percent in 2017) of the organs of state, submitted their annual black economic empowerment (BEE) compliance reports, as is required by law.
“The report shows no significant change in the levels of transformation with black ownership reflecting a decline to 25.2 percent black ownership from 27 percent in 2017.”
Management control for black people on JSE-listed companies was also still sitting at 38 percent for black people, the commission said.
Cosatu spokesperson Sizwe Pamla said nobody should be shocked at the slow pace of black empowerment, because BEE policies, while they had been set up with the best of intentions, had become “politically vulgarised” and were not being implemented properly by the government or the private sector.
He said BEE had started out with black leaders being appointed to top business posts for political reasons, and not because of their business acumen or entrepreneurship, and for a long time this was the face of empowerment, and the people who were supposed to benefit were sidelined.
He said much of the daily headlines about fraud and corruption in the private sector and in state-owned organisations, was due to the “political vulgarisation” of black empowerment policies.
“If you want to empower people you need to focus on the communities where you operate, and on giving your workers something to be able to carry on with their working lives if ever they leave your company, aside from just a pension payout,” said Pamla.
Section 13G of the B-BBEE Act makes it compulsory for all listed entities, organs of state, public entities and Setas (sector education training authorities) to submit compliance reports to the commission.
In 2018, the commission received 588 (851: 2017) reports from organisations with turnovers of between R10-R50 million, and 1061 reports from larger entities that were captured by B-BBEE verification agencies.
Marc Thompson of Thrive Corporate Advisers, which offers B-BBEE consultancy services, said from their experience the number of private companies putting their B-BBEE in place was growing and it was possible that the low number of companies submitting B-BBEE reports to the commission was due to the companies not knowing that they had to.
The commission said failing to submit B-BBEE reports may in future be followed by referral for prosecution.
“The low level of reporting and
the slow pace of improvement in B-BBEE elements is a concern, but
the B-BBEE Commission welcomes that B-BBEE compliance is now part
of the audit scope of the auditor-general and also that annual B-BBEE reporting is a listing requirement on the JSE.”
These interventions and the “enforcement actions” of the B-BBEE Commission were expected to result in an improvement in the reporting and extent of B-BBEE implementation, the commission said.