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

Amended Codes of Good Practice (2017)

Amended Code Series CSC100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment in the Construction Sector

Statement CSC100: The General Principles for Measuring Ownership

3. Key Measurement Principles

3.1 General Principles

 

3.1.1 An Entity receives points for participation by Black People in its rights of Ownership, using the Ownership scorecard in paragraph 2. Black People may hold their rights of Ownership in a Measured Entity as direct Participants or as Participants through some form of Entity such as:
3.1.1.1 A Company as defined in the Companies Act of 2008 (as amended);
3.1.1.2 A Close corporation;
3.1.1.3 A Co-operative;
3.1.1.4 A Trust
3.1.1.5 A Broad-Based Ownership Scheme;
3.1.1.6 An Employee Share Ownership Programme;
3.1.1.7 A partnership or other association of natural persons; and
3.1.1.8 Any form of juristic person recognised under South African law.

 

3.1.2 The Rights of Ownership held by black people in South African Multinationals are measureable against the value of their South African operations only. The Exclusion Principle must be applied with reference to the value of the Measured Entity’s foreign operations when calculating its ownership score.

 

3.1.3 The Measurement of Ownership in BEPs;
3.1.3.1 More than 50% of the total ownership held in a Measured Entity as a BEP must be held by individuals who are both:
3.1.3.1.1 Professionally registered with any of the statutory professional councils in the BEP environment in South Africa; and at the same time,
3.1.3.1.2 A member of the Executive Management of the Measured Entity;
3.1.3.2 Therefore when measuring the black ownership of any BEP, where the measured entity does not meet the requirements of 3.1.3.1 above, only 50% of the black ownership of those owners who do not meet the requirement of 3.1.3.1 may be included in the total measurement of black ownership in the measured entity.
3.1.3.3 For the avoidance of doubt, Executive Management in this context is defined as “Top Management” in terms of the Employment Equity Regulations and include the ‘Executive Directors’ and ‘Other Executive Management’ of the Measured Entity.
3.1.3.4 Where the ownership of a BEP is held by a holding company, the ownership in the holding company must comply with the provisions of 3.1.3.1, for the black ownership in the measured entity to be recognised, otherwise 3.1.3.2 will apply.
3.1.3.5 In addition, where the measured entity does not meet the requirement of 3.1.3.1, the measured entity does not qualify for automatic enhancement in terms of Clauses 4.2.3, 4.2.4, and 5.3.2. nor will it qualify for bonus points in 2.4 of the ownership scorecard.