Rupert’s R1bn donation: SMEs may apply for funding of up to R1m

The application process may open before the end of the week.
Image: Shutterstock

An earlier version of this article stated that the R1 billion donation was in fact not a donation, but a loan. This is inaccurate, as the R1 billion is a donation. Moneyweb regrets the error. Read a full apology here.

Small and medium enterprises (SMEs) may apply for R250 000 to R1 million in funding from the R1-billion donation the Rupert family made to assist businesses in financial distress as a result of Covid-19.

Business Partners, a subsidiary of Remgro, will administer the process. An online application portal will be launched by the end of the week through which SMEs can apply for assistance.

The Rupert family founded Business Partners in 1981 and it has since been providing a range of funding and related support services to SMEs.

“We expect to make an announcement regarding the criteria, repayment terms and how to apply for the finance this week,” Business Partners Managing Director Ben Bierman said on Sunday,

David Morobe, the executive general manager for impact investment at Business Partners, explained that assistance will be in the form of a loan, which is repayable over a period of five years. “For the first year, applicants will not have to pay interest or instalments, but thereafter they will be expected to do so. We are hoping that the impact of Covid-19 would have receded and the businesses will be able to repay the loans on commercial terms.”

He says that applicants must prove that their businesses are in financial distress as a result of Covid-19. “We are going to look at a number of factors such as the extent of a decline in revenues, while still having to pay overheads such as salaries and rent.  The businesses also need to meet the following criteria:

  • South African owned;
  • SME
  • Tax compliant
  • Have annual financial statements
  • A three-month bank statement
  • Proof of the employment of employees
  • Rent statement
  • Supporting documentation showing how the business is in distress as a result of Covid-19

There will be no financial assistance to businesses in primary agriculture, mining and non-profit organisations.

Morobe also called on other creditors such as banks and landlords to come on board and assist SMEs and to allow them some breathing space.

Morobe said all funds that SMEs repay in terms of the scheme, will be reused to assist other distressed SMEs in future.


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Why is the heading so negative? Why not be grateful that these funds are available and have not been taken out of the country? The photo also leaves much to be desired.

This whole funding thing is a clever tax reduction scam. Essentially they are using their money as “donations” which them becomes tax deductible. As most people know when you donate money it changes ownership. However the donated money they donate does not change ownership, it is still their’s! The “donation” is now used as capital for business loans that accrue interest.

Essentially they will deduct the R1B as an expense and pay significantly less tax next year, WHILST STILL owning the R1B. They have not lost 1c and are now paying significantly less tax. The whole thing is a tax scam!!!
Man the rich just get richer. This cannot be right!!

The rich think, and this is so right.

@Boombang that is true but there never was a donation or help from these people. The Oppenheimers were not acting in solidarity or empathy with people/companies when they donated/loaned that money. Think about it this way, let’s say next year their income before taxes is R1B, they simply deduct the R1B loan as an expense and their income before taxes falls to zero. Hence zero taxes are collected. It now saves them R280M in taxes while they still own the “donation” of R1B.

Once again we will have to pay more in taxes to cover that shortfall. This is not right.

If you truly want to see the worst in everyone’s intentions, you can. Zuckerberg made a $25m donation and someone made a video showing how much that equates to in liquid form as a proportion of 2l of water. You are doing the equivalent of this. Have you thought about how this could be a donation? Are you willing for a donation to be more than just a cheque being written and walking away? Consider the alternative interpretation:

If a company brings money into South Africa and capitalises a business that gives loans, would that be taxed as a donation? No, but it isn’t a donation. This billion rand capitalisation should not be looked at as a donation. They’re essentially just loaning money to Business Partners (“BP”) to on-lend.

Are the loans BP profit making? No indication that they aren’t. Will have to see what the interest rate they charge is.

Are the loans commercial? They’re being given to companies whose revenues are NEGATIVELY impacted, will not accrue interest for a year and capital repayments only start a year later. These are definitely NOT commercial and can be seen as a donation.

Why not just give the money to SME’s that are affected? How will you control what the companies do with the money? They may just furnish their apartment. A loan limits the risk of this.

What if all the loans get repaid – is that still a donation? If all the loans get repaid, it will mean businesses that are negatively affected have recovered to the point where they can repay their debt. It is highly unlikely that this will happen, but if it does, BP will pay tax on the income. It’ll be just like any other business, except one that kept small businesses alive that were in dire straights.

And if the Ruperts then take their billion rand BACK afterwards, then it can be seen as a bridge loan that kept our small business sector alive. Remember this is risk capital (and not a good use of capital if you want a return) and they are fully ready for it to be written off should all the small businesses they loan to go bust.

If BP takes a loss on this loan book and use the assessed loss to offset tax they pay on other parts of their business, that is a different story. In that case, the donation should be shrunk by the tax offset (i.e. 72% of the loss).


@JamesL in any normal business the capital invested is not tax deductible by the investor. When I invested money in my business the amount I invested was not tax deductible when I paid income taxes the following year. In their case…it is!!

What the capital gets used for is irrelevant.

You cannot have your argument both ways.

It is either a bona fide donation – the money does not need to be paid back – in which case it will tax deductible limited to 10% of the taxpayers taxable income. So no you cannot craete a tax loss using donations and it will still be a substantial net cash outflow for Rupert.

If it is a loan then no tax deduction is applicable. ABSA does not get to deduct the mortgage they gave you from their tax. If anything the interest free portion of the loan will be taxable – an imputed interest is normally included in taxable income if you grant interest free loans.

The question that you should be asking yourself is if you were a travel business (without 51% BEE shareholding so government wont help you) would you be grateful for an interest free loan to tide you over for a year or would you rather prefer to go to the bank and get bridge financing at 15% interest.

Thde level of negativity to Rupert in this country is amazing. Also discriminatory. English speakers do not level the same criticism against Openheimer or Motsepe, but Rupert’s every move is always analysed through the Stellenbosch mafia trope. The implacation being that the only way Afrikaners can succeed is by being crooks. No difference to the the abuse that Jewish people often suffer the world over.

The argument that the Ruperts made their wealth on the backs of black slave labour is of course utter hogwash. It completely disregards the fact that probably three quarters of the Rupert familys wealth came from Richemont (owner of Cartie, Montblanc, Piaget, Pannerai and a host of other brands) and British American Tobacco, both firms earn 0.1% of their money in SA. But rather than celebrate a family that managed to build two of the worlds largest companies from SA, they get insulted and besmirched. Why? Because they did not want to give handouts to Julias and Fat Floyd…

If I was Rupert I would have taken my money and moved to Switzerland a long time ago and given SA a big fat middle finger

Timmo: you sound like a tax expert. Please unpack your statement with reference to the Act?

I donate money and I pay less tax as the donated money comes off your taxable income. So obviously I gain in tax but you will never get back all the money you donated back. Remember it is a donation. It is commendable of Rupert to have done so. If you are going to gain by it why does not all business people do the same?

That is the beauty of private capital, you can deploy it how it suits you. Why not just give to the government seems to be the issue and it should be free since they can afford it.
Government after all does have a outstanding record of supporting business and creating value (GDP growth = FA for 5+ years). By making sure people can repay the loans they are ensuring sure that viable businesses are supported which creates value.
If you have a problem with this you don’t have to take their money.

Common, Vodacom and MTN- you have been cashing in billions from the very clients who are in trouble now- follow Mt Motsepe, The Oppenheimers and Mr Rupert and Naspers- your clients need your R 1 billion each as well.

This proves my point; “The rich think, and this is so right”…

Only one sentence to acknowledge the “thought|” of the rich then discourse ensues. Can more of the rich put their hands in their pockets and help us… To those much is given, a time comes when much is expected from you… Please help, that is being human.

Timmo, get your head read, they don’t need to do anything, They do this and the impact on jobs and peoples lives outweigh any tax relief they might get. Give yourself a slap and you will realise that you are being dof!

Johan should have just kept his money. It’s in bad taste.

Instead of shooting ourselves in the back all the time, it would be much better if projects like this are better explained to eliminate the sniping. I assumed the donation part would cover the bad loans and any admin cost. That means 1b is actually more like 3 or 4 billion of assistance.

Problem is everything in this country needs to be viewed through a racial/political prism.

Rupert for some reason has become the face of white monoploy capital. The SA media trying to be woker than woke will fall over themselves to discredit him.

Ruperts donation/loan/assistance received very little media coverage initially, News 24 did not even give it any coverage, while Patrice Motsepe’s donation had at least three articles dedicated to it.

Then the poorly researched article surfaced that MW had to apologise for.

That crook Surve is still walking around, yet the media and black twitter spend all their energy pursuing a businessman who has only made a positive contribution to this country

See below, out of Pieter du Toit’s Mafia book. Highest individual taxpayer in Sa for 20 years – and the idiots on twitter, most of who pay R 0 tax, has the audacity to say his largesse is merely a tax scheme.

The self-styled Afro-optimist doesn’t believe he’ll stay in the country if things don’t change drastically. “I’ve told some in government and the ANC in private as much: if Sars ever again tries to sabotage me … I have been by far the highest individual taxpayer in this country for the past 20 years. Our family companies are the biggest payers of dividends from outside into the country, more than what the rest of the JSE does combined,” he says.

Rupert says that he’s never taken money out of the country either. “I promised Gerhard de Kock [a past governor of the SA Reserve Bank] that if he allowed me to build Richemont overseas, I wouldn’t take money out,” he says.

My heart is here, but my body will be overseas. I don’t want to hear day and night about what we, the Rupert family, allegedly did wrong. That’s the main reason [for wanting to leave],” he says.

Perhaps more distressingly to the average South African, Rupert describes the country’s debt position as untenable, and says the cross-guarantees which keep most state-owned enterprises afloat could be disastrous.

“I think we’ll be at the IMF in a year’s time. [The governing party] don’t know what’s awaiting [it]. We’ll either have an Arab Spring-type event, or Ramaphosa must restructure everything. And he cannot do it. The IMF will, however, force you to restructure, and if you think about it, isn’t that the best thing that could happen to the country? Halve the public service, clean up the state-owned enterprises,” he says.

SA needs the Ruperts (desperately), not the other way round. Timmo, very few people buy your argument.

Absolutely – God how I hate these narrow minded dof disrespectful uneducated ungrateful idiots who waffle on – what have they done to help???

My gripe is not with the Ruberts or Oppenheimers but with the very rich making donations and then expecting the donations to be paid back to them, whilst deducting the donation as an expense from their tax bill next year!

If you donate money it is gone!! You cannot get it back because it has changed ownership. That’s all.
Unless my understanding of a donation is completely warped!???

You are spreading fake news. As I laid out earlier either the grant is not repayable, in which case it is a donation and he will be able to deduct up to 10% of his taxable income (so it is impossible to create a tax loss)


it will be repayable, in which case it is a loan and he cannot deduct it from his tax.—Clarification-Note-on-Donations-Tax.aspx

“The term “donation” refers to a gratuitous disposal of property. A donation requires an element of sheer liberality on the part of the donor, thus highlighting the requirement that the transaction must be gratuitous in nature. Where there is an element of expectation for something to be given in return, it can therefore not be a donation.”

To all the negative commentators on the Rupert financial assistance to SME’s: herewith a portion of my comment in an earlier post (Jan 2019)

“Likewise, they financially helped many poor but deserving students – but with two provisos: the student must provide the first 50% of the funds required and they will match it Rand for Rand. Second proviso: every student must, when successfully qualified, also assist another deserving student on the same basis – a multiple effect. The did not believe in handouts.

The above sounds old school but it is tried and tested principles for an enduring life”.

The tax implications (if any) of the donation / loan by Rupert is irrelevant in the current situation. Fact is we have a well resourced person who is prepared to provide funds via Business Partners to assist SME’s during this difficult times. I will probably have to apply for assistance – no cash flow for April, etc.

Do I want a handout of a loan? I would prefer a loan.

I would rather be able to tell my grandchildren one day that during this trying times the best in humanity came to the fore and my business was saved through such generosity but that I was able to repay my debt and that in the future, when they may be in a situation to help others financially, to do it responsibly, but most importantly, in a spirit of gratitude.

Stop the negative REACTION and start thinking about positive RESPONSES to the current dire situation!!

Mr Rupert is a much better man than me. If I was treated the way he is by the government and the media, I would have left SA for good a long time ago.

End of comments.




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