THE DETERMINATION OF BLACK OWNERSHIP IN COMPANIES FOR THE PURPOSE OF BLACK ECONOMIC EMPOWERMENT (PART 1)

Abstract

In Part I of this two-part article the primary statutes regulating black economic empowerment are considered. The Preferential Procurement Policy Framework Act 5 of 2000 with its regulations determines the parameters within which organs of state may give preferential treatment to historically disadvantaged suppliers when making procurement decisions. The Broad-Based Black Economic Empowerment Act 53 of 2003 creates a legislative and bureaucratic framework for the realisation of black economic empowerment, that includes codes of good practice that seek to introduce an empowerment agenda to a variety of administrative decisions, including state procurement. This overlap in application leads to conflicts between the duties placed on the state by the two Acts, and it is submitted that the Procurement Act and its regulations require amendment that will have to coincide with the coming into effect
of the codes of good practice under the BEE Act. Part II of the article will analyse the recognition of black ownership in companies arising from the sale of equity instruments.