BEE-deal making has undergone intriguing phases throughout its duration. In the new trend, companies seem to have realised that ‘real empowerment begins at home’, Transform SA discovered in a research of recent BEE transactions. In the latest development, companies have diverted their attention from black investment companies towards in-house employee trusts.
The problem deal vendors do face is understandable, according to an analyst from a top fund management firm who asked his name to be mentioned. He wondered: “Who in their right minds would take on the risk of not doing another deal and sacrifice their BEE credentials?
“On the other hand, in the current economic environment companies don’t see the incentive of funding a new BEE deal and wait for it to mature.”
Instead of the two options, the analyst regarded the move of creating a trust for employees as the more plausible option. As this won’t be time-bound, companies won’t be under pressure.”
As a result of the development, companies that are unwinding their empowerment deals have been caught between a rock and a hard place. ABSA finds itself with this pickle regarding its Batho Bonke vehicle.