DTI ‘not at odds with Sasol’ over BEE deal

The Department of Trade and Industry (DTI) on Tuesday reiterated that it was “not at odds” with petrochemical giant Sasol over its proposed R7-billion employment share-ownership scheme (ESOP) despite recent media reports to the contrary.

“Media reports about the Sasol … black economic empowerment [BEE] deal would seem to indicate that there is some confusion about the department’s position on the issue,” the DTI said in a statement.

This was after South Africa awoke on Monday to headlines declaring: “State official muddies water on Sasol BEE deal”.

Other media reports said that the government had “berated” Sasol and that the DTI said Sasol BEE “misses target”.

“The DTI would like to reiterate that it welcomes the deal which will see 10% of Sasol sold to broad-based empowerment groups in what is hailed as the largest-ever BEE deal in our economy at an estimated value R18-billion,” the DTI said.

“Given Sasol’s status as the largest industrial investor in the South African economy, the department deems it appropriate that the company should be a major champion of [BEE] and the transformation of our economy,” it added.

South Africa’s third largest company, Sasol last week said its employees would get the largest share of the BEE stake.

In terms of its announcement, 4% of the shares, worth more than R7-billion, had been allocated to an ESOP that would benefit more than 27 000 of its employees.

Of the remaining shares, 3% would be offered to the broader black public, possibly through a retail offer, while 1,5% would go to black partners and another 1,5% would be put into a still-to-be-established Sasol Foundation, which will contribute to growing South Africa’s skills, particularly in science and technology.

“Collectively, these features indicate that the deal is generally in line with government’s Codes of Good Practice,” the DTI said.

Concerning the ESOP, which included white employees, the DTI said it wanted to “emphasise that it is not averse to the inclusion of white employees in ESOPs as suggested in some reports”.

This is despite the DTI last week Friday saying that it was “concerned that Sasol’s proposed ESOP falls short of the level of empowerment envisioned in the Codes”.

Sasol executive director Nolitha Fakude said that participation of both black and white employees at below managerial level was something that Sasol consciously embarked on.

“Share ownership for all employees was important for us,” Fakude said.

Sasol said in its BEE announcement on Monday that 3,7% of the 4% would go to South African employees, which (at current employment ratios) would mean 2,2% would go to black employees and 1,5% to white employees.

The remaining 0,3% of the 4% stake would be allocated to black managers and black non-executive directors.

But the DTI said it “trusts that its encouragement of Sasol for the ESOP aspect of the deal to provide for the level of empowerment envisioned in the Codes will dispel any uncertainty about the department’s position or any notion that it regards the company’s deal as insufficient in terms of its … objectives”.

“The department wishes to state categorically that it is not at odds with Sasol over this initiative, and will continue to interact with the company over many issues of common interest,” the DTI said. — I-Net Bridge

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