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Another milestone

29 October 2004 Angelo Coppola

The second stage of the deal is formalized and now a more broad-based shareholding grouping in the BEE consortium in ABSA is announced, although Tokyo Sexwale maintains a 7% interest, with Leslie Maasdorp and Ntobi Angel sharing 7%.

But how broad based? Well the primary shares allocated to the BEE portion of the business have just been announced, and the Batho Bonke consortium now has the following face:

Community trusts get 19.6%%; BEE companies get 18.8%; individuals took 20.7%; women’s groupings take 4%; regional co-ordinators take 7.2%; Leslie Maasdorp and Ntobi Angel take 7% and Tokyo Sexwale takes 7%.

In terms of regional co-ordinators is one Mathews Phosa, who spoke on behalf of 1.1 million beneficiaries. “We will bring the accounts,” he assured the bank.

To top the numbers up, 11.4% of the shares have been allocated to historically disadvantaged junior, middle and senior management; 4.3% to provisional, regional and main board members and other selected individuals.

In a nutshell the consortium will purchase a 10% interest in Absa in the form of option holding redeemable preference shares (73 152 300 shares have been identified) and will be transferred in January.

According to Danie Cronje, chairman of Absa, this milestone is a milestone for 100s of 1000s of people, who now become shareholders in one of the country’s biggest banks.

Tokyo Sexwale, chairman of the BEE consortium, says that the bank and its leadership realized that the BEE deal was the right thing to do for the country, and its people.

The decision to do the deal was taken by an essentially white board, and interestingly enough the ABSA leader during the transaction, Nallie Bosman, who has just retired from Absa, was appointed to the board of the Nelson Mandela fund – “He now works for me,” joked Sexwale.

"The same old culprits comment hides the small print," said Sexwale. "If the beneficiaries were to be brought before the media they would fill all the stadiums around Gauteng and then some."

“The comment that empowerment is only about enrichment, is a misplaced comment,” says Sexwale. “The debate looses direction because of a lack of information.”

Commercial and business logic must prevail, in spite of the BEE component. The deal is not about building NGO structures. "This is a bank, and must continue to make money. The purpose of the consortium is to add value, find accounts and find business, and its starts with the members of the consortium.

“We have come to work. Empowerment is about work, and about risk. There is a risk in any transaction.”

Sexwale said that they had raised R140m to pay for the transaction. "We are paying for this share. It’s a gamble and a risk and we expect returns."

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