JSE change imperative

2010-09-04 08:35

Business Unity SA chief executive Jerry Vilakazi has warned that the country could be headed towards more state intervention if businesses fails to implement transformation policies vigorously and quickly.

“If we don’t move fast, people will call for .?.?. nationalisation. You don’t want people to forcibly take over what they feel has been denied them,” Vilakazi said.

He was reacting to this week’s research by the JSE that showed black investors owned 8% of the bourse’s Top 100 companies.

The research surveyed 100 companies representing 85% of JSE’s market capitalisation, which stands at R5.7?trillion.

Restricting ownership of the JSE to South Africans shows that they own 44%. Of this figure, black ownership rises to 18%.

The study confirmed what many black economic empowerment (BEE) observers have been lamenting for a while – the slow pace of participation by blacks in the South African economy.

Earlier this year, BEE ratings agency Empowerdex said debt-free or unencumbered black ­direct ownership of JSE companies was a meagre 1.6%.

The agency also found that JSE black direct ownership was 6.87%, a figure that is in line with the JSE report.

Tsakani Matshazi, the president of the Advancement of Black Accountants Southern Africa, said the JSE report had failed to take into account that a big chunk of the 8% black direct ownership was saddled by debt.

“The debt associated with most BEE shareholding structures is often fairly high.

“In fact, the unencumbered portion is likely to be closer to what Empowerdex indicated earlier this year,” she said.

Matshazi and Vilakazi are part of the 19-member BEE advisory council, which advises President Jacob Zuma on the implementation of empowerment.

JSE chief executive Russell Loubser believes the research has enriched the debate.

“There has been much discussion about black ownership on the JSE. Various and quite ­divergent numbers have been mentioned.

“With the JSE’s unparalleled access to share data, we wanted to enrich the debate through ­presenting the facts in an impartial manner,” he says.

Vilakazi’s warning comes as the ANC prepares for its crucial national general council meeting, which kicks off in Durban on September 20.

At the meeting, the ruling ­party is expected to debate the ­nationalisation of mines, which the ANC Youth League is ­advancing.

The league argues that BEE in the mining sector has enriched a few blacks and failed to spread benefits to the poor majority.

Vilakazi said he saw encouraging black entrepreneurs to ­establish their own enterprises while at the same time pushing for more transformation of the economy as one of the solutions to accelerate the inclusion of blacks into the mainstream economy.

“We need to strike a balance between focusing on SME development and BEE,” he said.

“Through procurement policies, the government and the ­private sector must support black-owned SMEs, which are being squeezed by big firms which have sold 10% or 20% to black people and are now competing for the same opportunities as black-owned SMEs.”

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