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Dti withdraws empowerment change

After company backlash.
Rob Davies, dti Minister
South Africa’s government scrapped a plan to change rules aimed at redressing economic inequality and empowering black business people that threatened to put new investment deals in the country on hold for months.
 
Trade and Industry Minister Rob Davies withdrew an official notice of May 5 that said companies would get fewer black economic empowerment points if their non-white shareholders are community trusts or employees rather than individuals or black- owned businesses. The points are part of an assessment system that gauges whether companies can win government contracts.

“This is a very welcome, sensible decision given the original guidelines struck a lot of fear into investors about the state of their Black Economic Empowerment settlements,” Peter Attard Montalto, an economist at Nomura International Plc, said in an e-mailed response to questions.

Uncertainty surrounding the May 5 order and a lack of clarity on timing of the changes had created uncertainty among companies and investors, according to lawyers from Norton Rose Fulbright LLP and Cliffe Dekker Hofmeyr. South Africa’s empowerment laws are designed to help citizens disadvantaged by apartheid, a system of whites-only rule, to get ahead in business.

©2015 Bloomberg News

 
 

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Another case of “unintended consequences”, which actually means it wasn’t properly thought through in the first place.

It is about time that business owners (shareholders) draw the line in the sand regarding BEE and the constant attacks by government on property rights and the free market. Farmers association Agri-SA set the example by standing their ground on this matter. The ANC opportunists will keep on infringing on property rights until we as owners draw the line in the sand and make a stand. The time is now.

Yet again, our state, is left with egg on its face, over yet another bungle-up. This I’m afraid, is a reflection of a lack of cohesion between government, business and empowerment groups, proves that B.E.E is on shaky ground, and has become just another red-tape box to tick. Zero points to Rob Davis

Davies is the biggest idiot – he is constantly involved in withdrawals of poor policy announcements; 1st the issue of licenses for every business, then working out the efficient CEO of Cipro and now this. When will Zuma get rid of this poor chap!

Davies is a joke – always having to withdraw bad policy decisions. Goes to show how he has no clue what to do with BEE and complete lack of understanding of the private sector.

Uncertainty is the by-word of the ANC.

De-racialise transformation and the country will transform quickest.

it looked like the ANC led government was showing the black middle class – the main beneficiaries of the “broad” part of this schemes – the middle finger. it made sense as these groups seem to be losing interest in voting for the ANC.

End of comments.

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