Empowerment leeway for banks

The amended Financial Sector Code would be likely to permit banks to provide "equity equivalent" funding to black businesses on the exit of empowerment partners, rather than only being able to top up black ownership levels with new equity deals, according to an independent consultant. Banks, life insurers and short-term insurers were likely to be given "practical funding options" upon the exit of black empowerment partners, said Erosha Govender, transformation strategist at Alternative Prosperity — specialists in Broad-Based Black Economic Empowerment (B-BBEE) with representation on the Department of Trade and Industry’s B-BBEE technical committee. "Stand-alone asset managers and other industry players are likely to be subject to generic code rules on the exit of empowerment shareholders, but discussions with the department are still ongoing," Govender said on Tuesday. Her comments follow last week’s warning from Parliament’s finance committee chairman Yunus Carrim, who told banks t...

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