The government has laid down tough conditions for empowerment partners in South Africa’s proposed second fixed-line telephone company, including requirements that they must advance previously disadvantaged groups, not merely enrich individuals, and they must promote women and youth, writes Barry Streek
The conditions for applications for the 19% shareholding by “historically disadvantaged groups”, published in the Government Gazette, reflect a strong desire to broaden the benefits of empowerment deals. Many of these deals have been criticised for enriching a select band of individuals.
The conditions say the black economic empowerment component “must be a company duly incorporated according to the laws of South Africa, owned, managed and controlled by persons from historically disadvantaged groups who are South African citizens, and applications must indicate that ownership will benefit South Africans to ensure empowerment”.
The requirement that the company be owned, controlled and managed by people from previously disadvantaged groups is clearly aimed at the practice of black “fronting” for white interests.
Applications for the 19% share of the so-called SNO (second national operator) have to be submitted by March 14 this year.