Durban - THE recently unveiled Discovery Bank will not withdraw the decision to allocate 10% shares to its black depositors, despite backlash from formations such as AfriForum, which has described the move as racist.
Barry Hore, the chief executive officer of Discovery, said the decision to allocate the shares only to blacks was driven by a “deeply patriotic and values driven organisation”.
He said it was committed to investing in excess of R13billion in South Africa over the next five years.
“The recently launched Discovery Bank is central. Against this background, there is a clear moral imperative and statutory requirement for transformation in our society,” he said.
“Specifically, as part of the licensing process, a commitment was made to the South African Reserve Bank of direct black ownership in the bank.”
People who were not Discovery clients could also join the bank. However, clients could only join in March when the bank becomes operational.
Hore said the bank’s Broad Based Black Economic Empowerment scheme has been structured in a broad-based and equitable way.
“It is important to clarify that this is not a donation and the shares are not free. Qualifying participants will need to purchase shares via vendor financing and will be subject to conditional requirements that will need to be met over the term of the scheme.”
Asked who was defined as blacks, he said those who fell under the umbrella of BBBEE legislation. This included Africans, Indians and coloureds, according to Act 46 of 2013 (“the B-BBEE Act”).
“Our view is that a BBBEE scheme that will have broad reach by directly linking to individual clients is equitable and preferable than a scheme in which only a few people or narrow groups would benefit,” said Hore.
But as Discovery celebrated its new initiative, AfriForum’s deputy chief executive officer Ernst Roets described it as “unashamedly racist”.
AfriForum had also urged those who felt offended by the move to approach Discovery and air their “shock and disappointment”.
Hore said: “We are engaging with AfriForum to clarify the rationale for Discovery Bank’s BBBEE scheme.”
Malusi Zondi, secretary-general of Federation for Radical Economic Transformation (Fret), a pro-black business lobby group, welcomed the move but said he would be engaging with Discovery to ascertain the criteria.
“This is a right move in addressing the injustices of the past which sidelined blacks from participating in the economy.
“We applaud Discovery but I will be meeting with them soon because we don’t want this opportunity to be scooped by the people who are already rich. This must benefit poor black people,” said Zondi.
Pierre de Vos, a legal expert, said those who were waging a war against Discovery were fighting a losing battle.
De Vos said the people who were criticising Discovery Bank were mistaken because the issue of redress cannot be ignored.
“Those who wish to challenge the Discovery Bank scheme will not be successful in arguing that black people who join the bank will largely be middle class and are therefore not affected by unfair discrimination,” said De Vos.