Please find herewith the discussions that took place during a workshop about Gazette No 41546 issued on 29th March which proposes significant changes to the BEE Codes of Good Practice. Mantis Networks and Signa Group cooperated in running a well attended workshop on the 9th May in Midrand with more than 100 attendees where we presented and discussed these proposed changes. The workshop’s findings and general opinions were subsequently summarised and formalised into a set of comments that were sent to the Dti yesterday. These comments are attached for your information.
The general view was quite negative in that the proposed changes encourage further narrow base transformation at the expense of the purported broad-based objectives. As such they undermine the President’s stated objective of creating 1 million jobs.
At a meeting between Mantis and an international industry body a few days later, the reaction was more emphatic in that the proposal for enhanced recognition to BEE Level 1 & 2 for all organisations with 51%+ black ownership, if ever implemented, will significantly erode foreign direct investment and might well encourage disinvestment. This undermines the President’s 2nd objective of raising R1 Trillion in FDI.
Surprisingly there are some 2,000 EU based companies operating in South Africa and 88% of FDI emanates from the EU. Circa 600 of these companies are German owned and the majority of these are family owned businesses.
The recent announcement by the UAE that they intend to permit 100% ownership in foreign owned companies and long term visas for technical personnel paints a vivid backdrop to this subject and to the real competition today for FDI.
These proposed changes to the BEE Codes must been understood in the light of the realities and likely reaction of local and international business!
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