Seventy-two percent of black economic empowerment (BEE) transactions in 2003 by value involved at least one of the top six BEE consortiums, according to Minister of Trade and Industry Mandisi Mpahlwa.
In a written reply to a question in Parliament, asked by Democratic Alliance MP Enyinna Nkem-Abonta, he said the consortiums were ARM, Mvelaphanda, Shanduka (MCI), Safika, Kagiso and Tiso.
However, transactions that represented almost 40% of the total transaction value involved broad-based BEE entities, and at least 6,4% of the transactions (by value) involved employees.
”The position has changed significantly, as most of the 2004 transactions involve both broad-based BEE entities and employees that have formed consortiums.
”In addition, the composition of Mvelaphanda and Kagiso include broad-based trusts and entities,” Mpahlwa said.
The total size of the 118 transactions with reported deal-value was calculated at R39,2-billion.
But, another study conducted by Ernst and Young estimated the total number of BEE transactions (including unreported transactions and transactions where BEE investors disposed of assets) at 189 transactions with a total deal-value of R42,2-billion.
”However, the reported transaction values, as presented in the media, have sometimes included parts of complex transactions that do not involve the BEE partners.
”There are also scenarios where the black investors have claims to only a fraction of the equity-right on inception.
”As both of these scenarios distort the accuracy of the reported values in reflecting the assets acquired by BEE partners, the Department of Trade and Industry calculated the effective BEE value of the transactions by stripping out the portion of transaction which does not involve BEE partners, recognising only the asset or equity with economic benefits flowing to black investors on inception.
”This analysis estimates the total effective BEE value of the transactions at R28,4-billion,” Mpahlwa said.
It should also be noted that the BEE value approximated the economic benefits that would flow to black investors.
The average value of the 118 reported deals was calculated at R515,3-million, but after stripping out the non-BEE portion included in the reported value of BEE transactions, this was reduced to an estimated R373,99-million.
The biggest BEE deal announced in 2003 by rand-value was between ARMGold and Avmin at R10,6-billion, while the smallest reported deal was a transaction involving the takeover of Maxtec by black management and employees at R500 000. — Sapa