Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Industry Charters

Information and Communication Technology (ICT) Charter

ICT Sector Code for Black Economic Empowerment

Code Series 100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 103: The Recognition of Equity Equivalents (Annexe 102 (A))

5. Two Specific Examples of Equity Equivalent Programmes

Purchase

5.1	Enterprise creation:

5.1.1

If the equity equivalent contribution of the entity involves the creation of a new Enterprise:

5.1.1.1

The new Enterprise must qualify as a Value-Adding Enterprise;

5.1.1.2

The creation of the new Enterprise must comply with the requirements for a Qualifying Transaction as defined in statement 102;

5.1.1.3

The creation of the new Enterprise cannot contribute to the Multinational's score under Code series 600; and

5.1.1.4

The equity equivalent contribution must involve the provision of interest free loans, No-Gain Grants or Human Capital Investments to the new Enterprise equivalent in value to 50% of the new Enterprise's projected operational costs for the first 3 years following its establishment.

5.2	Investment in social advancement:

5.2.1

An equity equivalent contribution of the entity applying for recognition of Equity Equivalents that involves enhanced Socio-Economic Development.

5.2.1.1

Must comply fully with Code series 700; and

5.2.1.2

Cannot form part of the score of the entity applying for recognition of Equity Equivalents under Code series 700.