A black economic empowerment (BEE) study of the top 100 companies listed on the JSE, indicating that direct shareholding by BEE companies was as much as 8%, is misleading, the Black Management Forum (BMF) said on Tuesday.
“The suggested figure is by definition inflated because the study has not drilled down to actual black ownership,” BMF president Jimmy Manyi said in a statement. “BEE shareholding is not always synonymous with black shareholding — the former could have a white component and thus be a distortion of what is effectively in black hands.”
Manyi said that if, for example, a BEE company that was 40% black-owned acquired a 40% stake in a JSE-listed company, the effective shareholding of black investors translated to only 16 percent.
Disappointment
The BMF was disappointed with the JSE, which commissioned the study, for what it termed “its mathematical manipulation to artificially increase black ownership in the top 100 listed companies”.
The BMF’s optimistic position was that black people owned less than 5% of the JSE.
“The study has unfortunately confirmed that transformation is in reverse gear,” Manyi said.
The JSE said it would respond to Manyi’s comments later on Tuesday.
Earlier this month, the JSE reported that, according to its survey, 8% of its 100 top companies by value were directly owned by black people.
The figure, however, translated to 18% when the Department of Trade and Industry’s regulatory framework was used.
‘Rigorous and transparent methodology’
Responding to Manyi’s comments, the JSE said it had wanted to present its findings in an impartial manner and the organisation took no view on what BEE ownership levels should be.
The JSE was also not involved in influencing BEE policy in South Africa.
“There has been much debate about black ownership on the JSE. Various and quite divergent numbers have been mentioned,” said JSE CEO Russell Loubser.
With the JSE’s unparalleled access to share data, the bourse wanted to inform the debate through presenting the facts in an impartial manner.
Loubser said the research was conducted through an independent research house, Trevor Chandler & Associates, and was verified by BEE ratings agency AQRate Verification Services.
“It was conducted using actual shareholder data obtained from the share registers of listed companies.”
Loubser said he believed this to have been a comprehensive study based on “a rigorous and transparent methodology”. — Sapa