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IDC lashed over proposed BBBEE status

Picture Credit: uprootdev.co.za
Picture Credit: uprootdev.co.za

Professional formations have written a letter to the government expressing concerns about the Industrial Development Corporation's (IDC) application for a broad-based black economic empowerment facilitator's status.

 

"If the IDC were to have the BBBEE facilitator status, this would mean that those untransformed white-owned companies would automatically obtain black ownership status points," wrote Progressive Professionals Forum secretary-general Siphile Buthelezi in a letter dated June 17 2016 and addressed to Trade and Industry Minister Rob Davies.

"Equity held by the IDC will be treated as 100% owned by black people, 40% owned by black women and 20% owned by black designated groups. Therefore the untransformed white-owned companies where the IDC is investing would be deemed to be BBBEE-compliant [when] in fact they remain untransformed." he said.

According to the notice of the public consultation process, the facilitator's status aim was to be able to raise capital or to accumulate resources that can be used for empowerment of black people.

Buthelezi said the IDC application was a rescue plan for white businesses that have borrowed from the IDC and wealth creation for white companies as it would increase the share value of rescued entities, preventing black entities from acquiring shares reasonably.

The Black Management Forum managing director Busisiwe Mavuso said in a letter sent to Davies on Saturday that as the IDC is funded by taxpayers, the BBBEE facilitator status "will introduce needless complexity of and competition for funding between the IDC and the National Empowerment Fund as both entities mandate will overlap once the BBBEE facilitator status is granted to the IDC".

sibanyonim@sowetan.co.za

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