Vodacom’s YeboYethu scheme and Sasol’s Inzalo scheme illustrate the yin and yang of black economic empowerment (BEE) schemes: one worked like a bomb; one bombed. What does this duality tell us about how BEE schemes are structured and perhaps about their social desirability? The most basic conclusion is also the most obvious: it helps to invest in a company that’s growing. Or, to put it another way, there is an element of luck involved, and that is part of the problem. When Vodacom began its YeboYethu scheme in 2008, its share price was about R60 and its market capitalisation about R83bn. Its share price is now almost R140 and its market capitalisation R240bn. This means its shareholders, BEE and otherwise, can reap the benefits. YeboYethu shareholders will be getting a special dividend of about 2.7 times their original contribution, and they will participate in the new scheme too.
Sasol launched its Inzalo scheme when oil prices were in three figures. Its market capitalisation...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.