Edition: September / November 2015
B-B BEE POLICY
When clarity is elusive
There appear to be conflicting strains in the ruling party on whether
the rights of pension funds, as shareholders in JSE-listed companies,
be ignored or stimulated.
Excuse ordinary mortals for being confused over
ANC policy on pension funds. Reading articles
at page one and page 10 of Business Times during an
otherwise-relaxed Sunday in June, they’d have been
struck between the eyes by a basic contradiction.
The front-page lead quotes Ngoako Ramatlhodi,
the Minister of Mineral Resources, explaining why
he’ll fight mining companies on how black economic
empowerment should be measured in terms of the
Mining Charter. At issue is whether, once a mining
company has concluded a BEE transaction, the miner
will retain its empowerment points under the charter’s
BEE ownership scorecard -- irrespective of whether
beneficiaries of the transaction subsequently sell their
Ramatlhodi says that miners shouldn’t retain their
BEE status. Miners say they should. The dispute over
application or otherwise of the “once empowered,
always empowered” principle applies similarly to
institutional signatories of the Financial Sector
If Ramatlhodi is right, then one BEE transaction
would have to follow another. On each occasion,
existing shareholders will be further and further
diluted. Because these shareholders significantly
include pension funds, with multitudes of black
members, they should be up in arms against the
financial loss that Ramatlhodi’s stance will cause
them. Empowerment of the few is the corollary to
disempowerment of the many.
Ramatlhodi . . . ready to fight
Implicitly, Ramatlhodi ignores the shareholdings of
pension funds. Explicitly, in an opinion piece at page 10 of the newspaper, ANC Gauteng chairman Paul
Mashatile highlights them.
Fundamental to Mashatile’s argument is the
vital role that pension funds can play in promoting
empowerment. He sees them as the essential catalyst,
through their voting power as shareholders, to
transform the boards of JSE-listed companies in the
Mashatile’s proposal can go horribly wrong if
it leads to inexperienced cadres pushing factional
lobbies. By the same token, it can go beautifully right
if it’s recognised that trustees’ sole fiduciary duty is
to their funds and directors’ to their companies. The commonality of trustees and directors is the pursuit of
prosperity for their diverse stakeholders and hence for
Ramatlhodi has planned to fight the miners in court.
Mashatile has planned to hear the representatives of
pension funds in an open forum.
Only one approach deserves support. It unnecessary
to spell out which approach this should be.