In an article entitled "Shrinking BEE stakes a cause for concern" Sibonelo Radebe of The New Age quote Ajay Lalu, a BEE Analyst saying: "Something is fundamentally wrong here....it is a worrying trend....Where did the significant portion of the money attached to this deal go? Who actually benefits from BEE deals? Someone other than the designated beneficiaries is making huge amounts of money out of an initiative designed to redress apartheid pathologies"
Mr. Lalu is further quoted as pointing a finger at the banks and the companies selling the so-called BEE stakes. His colleague Duma Gqubule, who is quoted arguing in the same article that there is no basis to the outcry that BEE deals were designed to benefit a few individuals effectively agrees with Mr. Lalu that there is something fundamentally wrong with the so called BEE.
The above two commentators are lamenting the effective checkmating of a "BEE" grouping called Dinatla that "bought" 15% shares in Bidvest in 2003. The outcry stems from the announcement that the so-called 15% stake has now shrunk to 4.5%. All one can say to Mr. Lalu, Gqubule and all the other believers in BEE is welcome to the real world brothers and sisters. In contrast Brian Joffe, in his "condolences" message is quoted as seeing things quite in a very positive light and to be saying:
"This unique BEE transaction represents more than R2bn of value realized for Dinatla. The transaction is remarkable for the scale of the value unlocked and in terms of the thousand of beneficiaries that will benefit from it".
Mr. Joffe and Mr. Gqubule, with respect both seem to be suffering from a similar disease, which I call the "Sandton syndrome", the inability to realize and separate reality from what is written in some piece of paper. They seem to believe, naively, that because a list of people's names were given to them as so called " broad based empowerment groupings or beneficiaries" those people really benefit out of these and similar deals. My advice to them is to take a drive and go and meet some of the so-called "beneficiaries".
In fact the Bidvest reporting comes at a particular interesting time when my organization, the ANC Youth League, has released a discussion document in terms of which it strengthened its call for the nationalization of the commanding heights of the South African economy. In the same document the ANCYL also allude to the "evil" and hoodwinking nature of the so called BEE in so far as it seeks to "benefit" a select few previously disadvantaged individuals,
However, something strange and disappointing about the ANCYL's position on BEE is the fact that their criticism of BEE in the document is rather incoherent and loose and one could only suspect that the authors of the discussion document had to constantly remember which side of their bread is buttered.
That aside the other interesting development with regarding to the timing of the Bidvest "dilution" announcement relates to the fact that over the weekend one Sunday newspaper reported about a similar strategic tactic adopted by Mondi regarding Cyril Ramaphosa's Shanduka Group shareholding "dilution" from 25% to 10%. In this regard the whole arrangement was coyly referred to as a "demerger" of Mondi Packaging SA from the parent company.
Another interesting aspect to this development relates to the reporting in the daily newspapers about the Bidvest arrangement. Interestingly the Pretoria News, a member of the Independent Group chose to headline with an article about the ANCYL President Julius Malema's so called "gunmen" and made no mention whatsoever including in its Business Report of the "dilution". The country's foremost business daily, the Business Day, could not be outdone by Independent Newspaper and also seem not to have heard about this. Coincidence? I don't think so.
In fact the fact that these newspapers conveniently (together with Sowetan) did not report on this rather negative piece of news about the collapsing of the façade created by white capital to cushion itself against the black government nationalizing their wealth, fits squarely in the norm. Whenever these kind of deals are "concluded" they receive prominent reporting in both the print and electronic media but when they unravel they are conveniently forgotten,
In any event there is no surprise there as both the media, banks and the companies concluding the so called BEE deals are owned or have an incestuous relationship involving the same players. It also explains why South African banks are not intermediating optimally or only lend out money to ventures proposed by a certain section of the population.
All the above having been said I hope there is someone, even if it is one person, at the top of the political leadership of this country and my party the ANC who is "informed" enough to realize that this BEE thing is a farce and that its only beneficiaries, save for a few co-opted individuals who are useful "condoms" for white capital to protect it from government, are white people,
Maybe it is time that it is completely scrapped and the dignity of real black entrepreneurs is restored and they stop being treated as "compromise" and "affirmative" business people. If anything the unraveling of the Bidvest and Mondi and other conveniently unreported and underreported "transactions" are is a clear testimony that the façade is crumbling and that it must be helped along by the total scrapping of BEE and a meaningful, proper and all inclusive economic model is adopted.
The writer is the CEO of Masephule Dinga Inc. Commercial Attorneys and a member of the ANC and its youth wing based in Pretoria.
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