14 September 2007
The Department of Trade and Industry (dti) welcomes the announcement by
Sasol Ltd of the broad outlines of a black economic empowerment (BEE) deal. The
deal, which will see 10% of Sasol sold to broad-based empowerment groups, will
be largest-ever BEE deal in the South African economy, worth some R18 billion
based on Sasol's market capitalisation.
Sasol is already one of the largest South African multinationals, with
mining and energy operations across all continents. It is also the largest
industrial investor in the South African economy. In the department's view, it
is only appropriate that such a company should be one of the champions of black
economic empowerment and other forms of transformation in the economy.
While we await the final details of the transaction, it appears to be
broad-based in nature and will include, inter alia, the participation of black
women, co-operatives, black suppliers and customers, black youth, the
facilitation of new entrants into the industry, and a proposed Employee Share
Ownership Scheme (ESOP). The involvement of the Sasol Foundation, which seeks
to produce critical skills in Engineering, Science and Technology, is also
exciting, and indicates that the company has adopted a long-term view to
empowerment. In these aspects, we believe that Sasol's proposed BEE deal is
broadly in line with government's codes of good practice for Broad-Based Black
Economic Empowerment (BBBEE).
Having said this, the dti is concerned that Sasol's proposed Employee Share
Ownership Programme (ESOP) falls short of the level of empowerment envisioned
in the codes. The BEE Act and its accompanying Codes of Good Practice were
specifically intended for the benefit of black South African citizens. This
therefore means that when reviewing a BEE transaction of this nature
recognition will only be given to the extent that black South Africans benefit
from the transaction. In the case of the Sasol transaction as the 4% allocation
made for an ESOP is to be shared amongst permanent residents as well as white
employees it is not clear what the effective allocation will be to black South
African employees.
In view of the statement made by Sasol in their announcement that the final
details of the deal will be announced in 2008, the dti trusts that this and any
other flaw in the transaction will be ironed out, so that the deal, in its
final formulation, fully embraces all the aspects of empowerment set out in the
codes.
Issued by: Department of Trade and Industry
14 September 2007
Source: Department of Trade and Industry (http://www.thedti.gov.za)
