Ben PietersFollowing the public outcry last week a BEE Codes correction was issued.  It dealt with the provisions relating to the revised BEE Codes of Good Practice coming into effect per Government Gazette 38764.

We see a DTI under the whip by issuing a notice on their website on 8 May 2015 to the effect that:

  1. the announcement that Broad-Based Ownership Schemes and Employee Share Ownership Programmes holding rights of Ownership in a Measured Entity which will only score points under paragraph 2.2.3 under the Ownership scorecard, will not apply retrospectively.   This statement runs counter to the wording per the Gazette. It cannot carry any weight unless it is published as an amendment to the BEE Codes in the Gazette.  Yet another inept effort by the DTI officials.  The statement was eventually published as a revised note of clarification per Government Gazette 38799.
  2. A Technical Task Team will be appointed to investigate and report to DTI on an appropriate balance  between direct and indirect equity ownership.  A clear acknowledgement that the gazetted announcement last week was an ill-considered, bungling error.

Also read the article appearing in Business Day here.

BEE Codes correction: DTI erred

The original oversight by DTI was dealt with in an earlier paper by us titled “BEE Codes of bad, bungling practice“.

BEE Codes correction fig 1Firstly the announcement of the BEE Codes in the government Gazette came several days after the originally announced effective date.  Perhaps a reflection of incompetency by the Department’s officials?

Secondly, two of the four aspects dealt with in the announcement reflect bad, bungling requirements. An indication that the officials have little knowledge and understanding of how the business world operates.

Why these issues could not have been thoroughly anlysed prior to gazetting it, badly reflects on the abilities of DTI. After all, they had more than 18 months to review the appropriate balance between direct and indirect equity ownership, yet failed to do anything.

Now a hastily put together task team must scramble to save face.

Errors like these destroy the otherwise sound underlying principles of the BEE Codes.  It leaves the private sector frustrated and negatively inclined about compliance.