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South Africa: A Good Deal
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Business Day (Johannesburg)
EDITORIAL
27 March 2008
Posted to the web 27 March 2008
Johannesburg
SASOL is SA's largest industrial company. It is also SA's largest taxpayer by far. And as one of our most important corporate citizens, what it does about black empowerment matters.
Which is why Sasol's R25,9bn empowerment deal is to be welcomed. Taken individually, its features are not new. But it has brought together "best of breed" empowerment approaches in a mega-deal that is genuinely broad-based. That could set the tone for other companies that have still to bring in black shareholders. And since the deal no doubt has the government's blessing, we must assume there has been a shift in the corridors of power away from empowerment deals involving black oligarchs and in favour of those that focus on staff, suppliers and the public.
There have been some empowerment deals without high-profile players, most notably FirstRand's. But Sasol's is by far the largest to go this route. There have also been employee share programmes (such as AngloGold Ashanti's), deals involving suppliers or clients (such as Old Mutual's) and a variety of retail offers to black members of the public. All have been attempts to enrich the many, not just the few, and there have been some innovative attempts to ensure BEE adds value, whether by tying in black managers or incentivising key business partners.
The Sasol deal introduces yet further innovations, spreading share ownership to an extraordinary range of people and partners -- even petrol pump attendants come into it somewhere. Though the group responded a few years ago to a barrage of criticism of its untransformed status by appointing black executives and directors, it has taken a very long time to do an equity deal. That has perhaps enabled it to benefit from the experiences of others. Its deal might run into criticism for being social investment, not empowerment. And it is a pity to have done so large an employee share ownership scheme without really consulting trade unions. Overall, though, this is a deal that sets the right tone for corporate SA. And it deserves congratulations.
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