Altech BEE under fire

Botha asked how Altech, a R5bn in market cap company, managed to win government business with black economic empowerment (BEE) transactions that he calculates to be worth just R32m under its belt.

The three BEE investors in the various group subsidiaries are Pamodzi Investment Holdings, Nariku Limited and Platina Venture Holdings, the latter a consortium led by Penuell Maduna that recently bought a 25.01% stake in Altech Alcom Matomo. But, entities within Altech that remain unempowered at the equity ownership level include Altech Autopage Cellular and Altech UEC.

Chairperson Hilton Davies said the issue of empowerment was top of mind at all board meetings and in between meetings. He promises it is working on addressing some of these issues, but said it would not implement transactions that did not make sense for the business.

CEO Craig Venter said the group had taken a view that it would be more productive to empower at the operating than the holding company level. It was also in the process of implementing BEE in terms of the other parameters laid out in the DTI codes, such as skills and enterprise development.

This is set out in a group-level document called Transformation Vision 2012. Venter said his remuneration was even tied to how successful the company was at reaching those targets.

Among other BEE initiatives, it was considering bringing a black women's group in to vehicle tracking subsidiary Netstar, Venter said. It had also committed to regulator Icasa that it would bring a 30% empowerment stake in at Autopage, as part of it being granted a Value Added Network Service (Vans) license, and stood by this commitment.

In order to be considered for scarce WiMax spectrum, however, Icasa said recently it expected applicants to have 51% BEE ownership. Autopage has gone to court to assert that it has the right to self provide its own networks (the hearings take place at the end of this month).

In so doing, it has also placed other potential licensees hoping to get Electronic Communications Network Service (ECNS) licenses on hold. An ECNS license would, however, be almost meaningless without access to WiMax spectrum.

Lack of transformation

Venter also said the group had committed to government that it would introduce 30% BEE ownership at UEC.

As the only local set-top box manufacturer, it could benefit from the country's upcoming shift from analogue to digital television.

Last year, parent company Altron made an offer to buy out the minorities in Altech. But, minorities led by the Public Investment Corporation (PIC) blocked this on the basis of wanting to be offered ordinary, not low-voting preference shares. PIC CEO Brian Molefe also reportedly included a lack of transformation amongst its reasons for blocking the transaction.

But, Altron CEO Robbie Venter said at the Altech AGM that the only issue around transformation that Molefe has raised with it at meetings before and after the transaction had been blocked, was a shortage of black female directors. It had addressed this with the appointment of Barbara Masekela to the Altron board in February, Venter said.

PIC director Zakhele Sithole recently joined the Altech board. Botha asked how Sithole could be classed as independent if the PIC was one of Altech's largest shareholders. But Sithole said he did not represent the PIC, nor voted on its behalf on the Altech board.

Shareholders voted in favour of all the resolutions proposed at the AGM, barring the proposed general authority to issue shares for cash. Davies said it had not received sufficient shareholder support for this resolution and as such had withdrawn it prior to the meeting.

The AGM, held at Altech's offices in Houghton, had 19 attendees including the directors, company secretary, transfer secretaries and a sprinkling of visitors.

- Fin24