The nature of empowerment deals has changed in the last few years, MD Samara Totaram told investors at PSG’s recent AGM. “Early deals were fully vendor funded, with big discounts and long lock-ins. This has changed and today companies expect BEE shareholders to put skin in the game.”
Another trend in BEE deal-making is the move away from black investment companies and towards employee trusts. “This notion of once empowered always empowered is a misnomer,” she says.
This means that companies whose empowerment deals are unwinding – as in the case of Absa’s Batho Bonke deal – are stuck in an awkward position. “They could choose not to do another deal, but then their BEE ownership credentials will fall. They could do another deal – but what company wants to fund a new BEE deal every seven years? Or they could create a trust for staff that exists in perpetuity. This is the option we think many companies will choose.”
via moneyweb.co.za
Enough of the Zuma-bashing for now. This is useful to know, I can see the trust lawyers rubbing their hands in anticipation.