As it turns out that the court found that there might have been a little (read a lot) misrepresentation about who the investors were behind the scheme. I am referring to the Rob Rose article in Currency.
I’m not going to go into the details of the deal, you can get that from Rose’s article. The BEE part of this deal is that DimDat wanted to up their black ownership, it seems that their target was black female ownership. The table below shows the timeline of this deal and the benefit it gave to Dimension Data.
|
Level |
Valid Until |
BO% |
BWO% |
BDGO% |
|
2 |
03 Sep 2025 |
22.8 |
3.71 |
1.04 |
|
2 |
24 Aug 2024 |
24.77 |
3.56 |
1.43 |
|
3 |
14 Sep 2023 |
24.77 |
3.56 |
1.14 |
|
2 |
15 Aug 2022 |
78.04 |
43.68 |
1.33 |
|
2 |
13 Aug 2021 |
72.36 |
38.89 |
0.0 |
|
2 |
23 Jan 2021 |
71.51 |
37.99 |
0.0 |
|
2 |
28 Nov 2020 |
51.0 |
37.99 |
0.0 |
|
4 |
18 Nov 2019 |
32.66 |
7.12 |
0.0 |
The highlighted rows show when the deal was active. You’ll see the certificate issued in November 2019 suddenly had an increase of about 30% black women ownership. The 51% in the table was wrong and was re-issued again to expire in January 2021 and then again in August 2021. I don’t have the actual certificates, I haven’t actually looked for them, so I can’t comment. The upshot is that DimDat’s BEE ownership level goes up by about 40%, of which ¾ of that was black female ownership. The change in the black percentage is derived from the black shareholders that own the listed shares.
HOW DID THEY DO THIS
They used STATEMENT AICT102: RECOGNITION OF OWNERSHIP IN THE SALE OF ASSETS. It must have been that the sale of the DimDat campus amounted to about 40% of the value of the company (roughly). There are conditions attached to these types of deals.
For Ownership points to be recognised the transaction:
Must result in the creation of sustainable businesses or business opportunities in the hands of Black people; and
Result in the transfer of specialised skills or productive capacity to Black people.
A Sale of Asset, Equity Instrument and Business must involve a separate Associated Enterprise which has:
No unreasonable limitations as to its clients or customers; and
Clients, customers or suppliers other than the Seller.
The whole transaction was apparently fronted (not the illegal type) by Sonya de Bruyn. But behind her was a rather intricate scheme, that the court ultimately unpicked. Rose suggests that there were allegations of fraud. This then becomes a criminal case as well – well potentially.
What happens now?
The six gentlemen in question have a lot of money. A hell of a lot of money. But then so does NTT (the shareholder of DimDat). The pyscho six are going to appeal and it will end up in the Constitutional Court at some stage – read in MANY years’ time. It must go to the constitutional court because it is the best case of fronting that I have seen. Thus far there has only been one case and that dealt with the big trains at PRASA. This will absolutely test the mettle of empowerment legislation. Fronting is fraud and hence the conditions for fraud need to be proved. But the Constitutional Court might give us some objective test for fronting and may even be forced to consider the constitutionality of BEE altogether.