Telecoms charter back in committee
The telecoms and technology empowerment charter steering committee is scheduled to meet next week to finalise the amendments to its draft charter.
The department of trade and industry (dti) sent the charter back to the committee for more clarity on the proposed exemption of some firms from the more than 25 percent ownership required by the department’s codes of good practice.
The delay in the gazetting of the charter leads to uncertainty over deals that have already been done in the industry and how companies should structure future transactions.
Norman Munzhelele, the acting deputy director-general at the communications department, said that the dti had requested clarity on the ownership clause, which allowed an ownership cap worth R7.5 billion, regardless of the percentage.
The dti’s codes of good practice called for a universal minimum target of 25 percent plus one share of black ownership.
“The dti questioned the economic rationale of allowing the R7.5 billion cap on ownership,” said Munzhelele. “We had to motivate that it would be [difficult] to raise funding in a situation where an entity has to buy a 30 percent equity in a company with a market capitalisation of R100 billion.”
Last year Vodacom, which has an estimated market cap of more than R120 billion, sold a stake of about 6.25 percent, valued at R7.5 billion, to black South African investors.
The dti’s chief director of black economic empowerment (BEE), Nomonde Mesatywa, said the department’s codes of good practice set out the universal framework for complying with BEE, and the sector charters should be in line with the codes.
She said: “If there are any deviations, such deviations must be justifiable based on sound economic principles or empirical research.”
The steering committee also tweaked the socioeconomic programmes and aligned the score card to that of the dti’s codes.
Munzhelele said the committee members, made up of telecoms and technology representatives as well as multinational bodies, met last month to discuss the changes.
They later consulted with their member companies about the amendments before the draft document could be taken back to the dti.
Asked why there had been a delay in finalising the information and communication technology charter, he said the setbacks were caused by changing of guards in the industry and the department of communications as new people had to familiarise themselves with the issues related to the charter.
Business Report
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