People call for radical options to rectify failing BBBEE deals

28 Mar 2018

Ujuh Correspondent

Total failure by the South African government to hold corporations accountable to their black economic empowerment (BEE) promises seems to be pushing affected masses towards radical alternatives like calling in the Economic Freedom Fighters (EFF) with its para-militaristic tendencies. This is slippery ground.

The search for alternatives is clearly displayed in the unfolding G4S South Africa BEE saga where affected workers have made a passionate plea for solidarity to the broader South African public. Several other BEE formations, including the failed R30 billion Sasol Inzalo BBBEE scheme and Nasper’s Welkom Yizani could fall into this line.

A heart wrenching open letter penned by one of Nasper’s Welkom Yizani investors captures this trend. Nelisiwe Amanda Mgcina calls for help to rectify a BBBEE deal gone wrong.

For its part, global security firm, G4S, stands accused of setting up a phony BEE type employee share ownership plan (ESOP). This plan was established in 2004 as part of a broader initiative that promised to transfer 26% of G4S South Africa shares to a broad based BEE consortium. The Esop portion, which was directed to about 15 000 workers, was meant to have half of this share, 13% of G4S South Africa. The other 13% was allocated to strategic BEE partners including Kagiso Ventures.

It’s been 12 years since G4S South Africa promised its workers an Esop benefit but they are yet to see a cent from the deal. And yet G4S and its executives have derived enormous economic benefit from the Esop/BEE established in 2006. The firm has earned business on the back of a claim that it’s got sound empowerment credentials. But this was false, at least to the affected workers.

The affected workers have been shouting for help for a number of years. A simple Google search fetches articles of G4S workers’ protest dating back to 2012. Their loud protests have fallen on deaf ears. Government hasn’t done anything about their situation.

The G4S workers aren’t alone in their frustration. It’s very easy to produce a long list of funny BBBEE deals that benefited corporations but yielded zero for the beneficiary base. This is more the case when the beneficiary base is made of mostly vulnerable individuals and groups.

Surely, the failed R30 billion Sasol Inzalo transaction belongs into this list. In 2007 Sasol went around the country selling a promise to effect a freedom dividend. It managed to convince more than 200 000 people to buy into its promise.

The Sasol Inzalo BBBEE scheme was scheduled to mature this year. The scheme has lived under water throughout the past 10 years. It has bombed out with Sasol setting out to do a follow up scheme called Sasol Khanyisa BBBEE scheme. Cries for help from Sasol Inzalo subscribers have fallen on deaf ears.

Similarly, South Africa’s media giant Naspers set up a BBBEE structure that gathered more than 100 000 subscribers in 2006 for its print media operation, Media24. Subscription price, of the scheme called Welkom Yizani, was set at R10.00 per share. The scheme has failed to produce capital appreciation. Many of its subscribers have lost money as they’ve had to exit it at R10.00, some below R10.00. Their cries have fallen on deaf ears.

It would seem people are losing confidence on government’s ability to hold accountable corporations that have failed their BEE promises. That is if some of the cries by affected workers are anything to go by.

A representative of G4S Workers Share Recovery Group expressed an impassionate plea for help to the South African public and to politicians with particular emphasis of the EFF.

The EFF emphasis can’t be accidental in coming after the party showed appetite to take up the struggles of black communities who feel hard done by South Africa’s post 1994 dispensation. That tendency is seen in EFF’s championing of the land redistribution question. And it was also shown when the EFF protested against global retailing giant, H&M, in the “Coolest monkey in the jungle” affair, in a campaign that turned ugly.

Government’s failure to perform its duty of monitoring, policing and enforcing the BBBEE framework is clearly forcing vulnerable groups to seek radical dangerous alternatives.

One Response to People call for radical options to rectify failing BBBEE deals

  1. Pingback: Undercover: Inside the EFF's bid to take on global security firm G4S | UJUH

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