This article was written by Ismail Laher, a Director at Norton Rose Fulbright South Africa
On 5 May 2015, the Department of Trade and Industry released a clarification note on the amended BEE Codes which confirmed the 1 May 2015 effective date of the amended BEE Codes and clarified those matters contemplated below.
In addition to the confirmation and clarification, the note amends the BEE Codes by limiting the recognition of ownership by Broad-Based Ownership Schemes and Employee Share Ownership Programmes to the broad-based ownership sub-category (3 points for a 3% broad-based owner).
- Broad-Based Ownership Schemes and Employee Share Ownership Programmes will not be recognised for the general 25% Black ownership category.
- An entity would need to have a 25%+1 Black individual owner (with 10% comprising Black women) and also a 3% broad-based owner to score full points for Black ownership.
Please let us know if you require any further information on how this amendment may impact on your shareholding structures.
The note clarifies that:
- Verifications conducted using the financial year ending before 30 April 2015 may still be conducted in terms of the original BEE Codes.
- The Sector Codes will remain in force until the end of October 2015. The DTI intends to revise the Sector Codes and repeal any Sector Codes which have not been revised during that period.
- All entities with valid BEE certificates issued under the original BEE Codes will be treated as empowering suppliers until such time as they release their BEE certificate under the amended BEE Codes.
Please let us know if you require any further information on the clarification note or BEE generally.