4 questions involving BEE

[Springbok]

from PlatoPrefs.com:

On 10/03: Four questions

1. I wonder what has contributed to the current account deficit? Can't surely be the 10 year BEE party, eh Mr M, Clever Trevor?

2. What is funding the spending chaps? Let me think: I wonder if its the 15-25% 'gift', 'bonus', 'pasella', 'Krismis box'.... Nah, can't be. That will be wisely invested, saved in post office savings accounts. Of course. Won't actually ever be used.

3. Now I wonder why we never thought of that eh, Mr M, Clever Trevor?

4. I wonder why the recipients of this lovely free moola, this largesse are now blamed for the c/a deficit, the soft currency, etc... and not those billionaires... Nah, that's just subliminal racism! And the legacy of the apartheid regime!

Maybe the report below may shed some light on the matter...?

On 10/03: This published yesterday

AngloGold signs R5.5bn staff deal

By Justin Brown Johannesburg -

"More than 30 000 AngloGold Ashanti workers in South Africa are set to get shares worth R36 000 each in terms of an employee share ownership scheme, which was signed yesterday with three major unions. AngloGold has a local workforce of 34 645 and the scheme will cover workers who are not already involved in a share incentive programme at the company's seven gold mines.

"Other companies that have established or are looking to establish similar share ownership programmes are De Beers, Kumba Resources and Impala Platinum. AngloGold chief executive Bobby Godsell signed off the Bokamoso programme, involving shares worth R5.5 billion, with the National Union of Mineworkers (NUM), which mainly represents black mineworkers; Solidarity, which mainly represents white workers and artisans; and the United Association of SA, which represents mine shift bosses and middle managers.

"In another deal, AngloGold sold 0.5 percent of the company's shares to empowerment firm Izingwe Holdings. Izingwe chairman Sipho Pityana will be invited to join the AngloGold board. The deals are expected to be implemented before the end of the year. The two deals, plus the sale of gold mines to Patrice Motsepe's African Rainbow Minerals, are likely to give AngloGold the 26 percent empowerment credit required by the mining charter.

"The share ownership scheme will run for seven years, with employees getting 20 percent of the shares due to them each year, beginning in the third year of the programme, for five years. Godsell put the cost of the free shares that AngloGold would issue to its employees at R225 million. On each vesting date, employees eligible for the programme will receive the full benefit of the free shares that will have vested.

"Thirty shares will be received free, while the remaining 90 shares will be loaned and sold to each employee at a 10 percent discount. Regarding the loan shares, the benefit will be calculated on the basis of the difference between the exercise price and the share price on the vesting date, taking into account an escalation factor accruing at 7 percent a year, reduced by any applicable dividend flow.

"Solidarity general secretary Flip Buys said the programme empowered workers on the basis of socioeconomic status rather than race. "The transaction is the harbinger of an era of 'new generation empowerment' in South Africa. The previous empowerment model was characterised by elitism, worker alienation and exclusivity. New generation empowerment is characterised by worker involvement and inclusivity." A trust will be established to administer the shares on behalf of the employees. AngloGold closed up 1.96 percent at R296.90 yesterday Gold mining was up 3.28 percent."

Published on the web by Business Report on October 2, 2006.

On 10/04:

You will note that the demerits and merits of AA (affirmative action) have not been touched upon in yesterday's comment. For those who are interested, a recent empirical study of the effects of AA in India, Malaysia, Nigeria, Sri Lanka and the USA see Sowell, Thomas. (2004). Affirmative action around the world: An empirical study. New Haven, Connecticut: Yale University Press. His findings are that its consequences contradict the expected pre-determined ideological rationale for AA.

An effective 15-25% redistribution of wealth has occurred in SA overnight. The sophistication of modern capitalistic instruments of finance were used, which probably created greater access to finance for spending than the 15-25% suggests.

The point of those barbed questions is simply that I have a choice word (which I will leave to your imagination) for those in fiscal financial circles who are apparently surprised at the level of domestic spend. If each and every one who 'negotiated' these innumerable BEE deals was unaware of this impending fact, of which the rand is now finally attesting, then.........