The biggest criticism of the plethora of black economic empowerment deals struck in the early part of the century was that black investors would only be able to pay back the debt to purchase the shares if the companies' shares appreciated over periods as long as a decade. By the very nature of markets, it's not something that can be guaranteed. The unwinding of Sasol's Inzalo empowerment scheme this week is further evidence of the inherent weakness of BEE deals completed before the 2008 global recession. Almost 10 years into the deal, the company has now had to undertake a new deal, called Khanyisa, as black investors in the first deal were set to walk away in debt. "What we have learnt is to rely on cash flows rather than the share price, and if you can, rather fund it internally than externally, and make it less complex," said Sasol's joint CEO, Bongani Nqwababa. Khanyisa eliminates the burden of owing banks money as Sasol will fund the R21-billion deal, and it is only going to be...

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