The B-BBEE Commission has published the 2nd Major B-BBEE Transactions Analysis Report for 2018/19 transactions based on the 95 ownership deals filed for registration, 70 of which were subsequently registered with 25 rejected due to failure to comply with the registration requirements. Therefore, the B-BBEE Commission will host a webinar session to take place on 05 August 2020 at 10h00, to discuss the report and the trends in these deals. The session will have Kganki Matabane (Black Business Council), Duma Gqubule (Economist) and Busisiwe Mavuso (Business Leadership South Africa) as panellists with Shawn Theunissen (Property Point) as the facilitator. The Report and the Register of these transactions is available on the website

B-BBEE Regulations permits the B-BBEE Commission to produce and publish a report or trends on the transactions filed. This flows from section 13F(1)(f) of the B-BBEE Act which requires the B-BBEE Commission to maintain a registry of ownership deals with a transaction value of R25 million and more. The report is based on these black ownership deals that parties would recognise on their scorecard for compliance with Statement 100 of the codes of good practice. The parties are required to register them within 15 days of conclusion.

The report looked at all 95 major B-BBEE transactions filed for 2018/19 FY and recorded a total transaction value of R 111,938 billion compared to a R188,7 billion from 272 transactions in 2017/2018 FY. Entities measured under the Financial Sector contributed the highest towards the total value with 39% (R44,155 billion) of registered transactions, followed by those in the generic codes sector with 37% (40,966 billion), compared to 2017/18 where it was generic code sector with 41.4% (R 78,091 billion) followed by Tourism Sector with 30.8% (R58,047 billion).

The report shows that 31 of the 95 transactions were vendor financed at 32.6% (35.3% – 2017/18), followed by share-swap at 17.9% (2.9% – 2017/18) and bank loans at 15.9% (19.1% – 2017/18), with the lowest being government financing at 4.2% (1.5% – 2017/18). Vendor-financing remains the dominant method of funding in these transactions with a notable rise in share-swaps.

Based purely on the information submitted by the parties to the transactions, the expected overall black ownership percentage is higher in 2018/2019 at 60% (48% – 2017/18) with black women ownership at 29% (20% – 2017/18). Conversely, there is a significant decrease in black voting rights from 46% to 32%. The voting rights for black women have also decreased and fell from 20% to 17%. New Entrants percentage decreased significantly from 22% to 13%.

Of the 95 transactions filed, only 70 met the compliance requirements for registration and were issued with the registration certificates. 25 transactions were rejected for failure to comply with the basic filing requirements. Individual assessment has been conducted in 56 of the 70 transactions, which are at different stages of alignment, however, 12 transactions were referred for investigation as they have failed to remedy the concerns raised by the B-BBEE Commission.

The common concerns of non-alignment to the B-BBEE Act that were identified and communicated to the parties to remedy within a specified period include the following:

  • The difficulty to trace the actual real black natural persons in the number of transactions registered. For instance, a number of transactions have multiple corporate structures using SPVs and often difficult to get to the real actual black person whose black ownership is claimed.
  • Black ownership percentage does not always correspond to the voting rights attached, with restrictions on those voting rights through shareholder agreements rendering the ownership to be merely on paper. Existing shareholders seemingly controlling the decisions and core operations of the entity despite acquisition by black people.
  • The funding arrangements extend the control of the funder beyond what is reasonable to secure the funding interest, in that in some instances the black shareholders must obtain prior approval or consent from the funder for aspects that ordinary shareholders should have control over, thus giving the funder control more akin to that of a shareholder in the transaction.
  • The limiting of the black ownership rights through the application of one-sided clauses such as non-compete clauses and restraints of trade that only apply against the black shareholder and not the rest of the shareholders.
  • Most of the black shareholders, especially when the shares are held through a trust, are not granted the right to participate in the appointment of board of directors and therefore do not have any influence over the core operations or decisions of the measured entity.
  • The inclusion of provisions that limit the flow of economic interest to black people, which have a negative impact on the repayment of the loan, as black shareholders are mostly dependent on the economic interest to repay the loan.
  • Most trusts presented facilitate skills development and community projects and not ownership to black participants, which means that the black participants are mere beneficiaries and not shareholders through the vehicle used for the acquisition.
  • In most trusts and broad-based schemes, participants and the portion of their entitlement to receive distribution of the economic interest are still not defined, which is a critical requirement, with no guidance in the trust deeds or constitution on how information relating to the identity of each black participant will be recorded.
  • Most transactions are structured in a manner where the beneficiaries will only be selected each year to receive benefits for education or it is stated that a portion of dividends will go towards projects. If participants that are natural black persons cannot be identified at the time of assessment, then it cannot be said to be black ownership for purposes of B-BBEE compliance.

Most parties have either remedied the concerns raised or at different stages of alignment with the guidance of the B-BBEE Commission. The main aim is to ensure that the ownership transactions concluded going forward do not present fronting indicators and misrepresentation. The B-BBEE Commission provides free advice to any stakeholder on transactions prior to conclusion.

The report shows that access to funding for black people remains a challenge which seems to have a direct influence on how the transactions are structured. For instance, the reduced voting rights can be linked to the fact that most deals are vendor-financed, with parties often inclined to include pledges, options and dividend restrictions that unduly restrict the ownership rights. Also, this may explain the reduced number of new entrants in these ownership deals with same parties reflecting in multiple transactions.

The B-BBEE Commission encourages corporates to engage in proper broad-based ownership to accelerate impact on black people and to provide funding that does not unduly restrict black ownership rights in question. The B-BBEE Commission will continue to ensure that entities adhere to the B-BBEE Act, and also invoke the enforcement strategy to hold accountable those that violate the B-BBEE Act.

The B-BBEE Commission acknowledges that measured entities are making an effort to achieve the black ownership target on the score card, which should impact positively on the extent to which black ownership and control is advanced to deracialise the economy as envisaged in the B-BBEE Act.

The B-BBEE Commission was established in terms of section 13B of the B-BBEE Act 53 of 2003 as amended by Act No 46 of 2013 with powers effective from 6 June 2016. The
B-BBEE Commission’s mandate, amongst others, is to supervise and encourage adherence to the B-BBEE Act in the interest of the public, conduct reactive and proactive investigations and promote good governance and accountability by creating an effective and efficient environment for the promotion and implementation of the objectives of broad-based black economic empowerment.


Issued on behalf of the B-BBEE Commission by:

Sidwell Medupe – Departmental Spokesperson
Department of Trade, Industry and Competition
Tel: +27 12 394 1650
Mobile : +27 79 492 1774
E-mail :
Follow us on Twitter: @the_dtic

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