Sizwe Nqgama, Black Business Chamber (BBC) president. Photo supplied.
THE Black Business Chamber (BBC) said yesterday that it was dismayed by how British telecoms firm BT had treated its long-standing black economic empowerment partner (BEE), African Equity Empowerment Investments (AEEI) on unfounded media reports and called on the Black Economic Empowerment Commission to investigate the UK firm’s conduct.
“This decision goes against the spirit of BEE, especially considering that, according to media reports, AEEI has been a shareholder in BT since 2008, with a 30 percent shareholding in the multinational group.
“While the BBC acknowledges BT’s commitment to BEE, we are extremely disappointed that they have terminated their relationship with AEEI, which has an excellent track record of both business and empowerment success,” the organisation said.
BT intends to exercise a call option to repurchase a 30 percent stake in BT Communications Services South Africa from AEEI, held through its subsidiary, Kilomix Investments.
The British telecoms company’s call option allows it to buy back the shares in the event of an act or omission, which was not remedied within 60 days.
BT in the media said it had cut ties with AEEI, a subsidiary of the Sekunjalo Group and would replace AEEI with another empowerment group to meet its BEE obligations.
On Friday, AEEI issued a trading cautionary and said until the validity of the exercise of the BT call option could be determined, and if it was validly exercised and until an agreement on the BT call option price was reached, shareholders were advised to exercise caution when dealing in the company’s securities until further announcements in respect of the BT call option were made.
The BBC said yesterday that BT had benefited from having AEEI as a BEE shareholder and had seen massive growth in its revenues and profitability during this period. BT and the media deliberately attempted to suggest that AEEI was a partner of BT and not a 30 percent shareholder of BT it said.
The BBC said it did not know the reasons for BT “terminating” its relationship with AEEI nor the terms of the call option to buy back shares from AEEI, but it noted that the way BT and its public relations office had targeted AEEI.
The BBC alleged that this suggested that BT had a devious motive to buy back the AEEI shares at a huge discount to its value.
The BBC called on BT and other multinationals to stop treating black businesses as extensions and only using them to gain empowerment points. It also called upon BT to meet with AEEI, respect its rights as a shareholder and either resolve its differences and/or negotiate in good faith and with good corporate ascendancies toward AEEI, if it wished to buy back its shares, it said.
It also said BT’s conduct must be investigated by the Black Economic Empowerment Commission and other authorities as the manner in which they had tried to exercise the buyback of shares suggested a forced sale and had used AEEI as a front to achieve their objectives during the good times.
philippa.larkin@inl.co.za
BUSINESS REPORT ONLINE
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