Govt signals shift in BEE - report

Johannesburg - Government is planning to shift black economic empowerment (BEE) rules away from equity investment and ownership towards productive activities, Business Day newspaper reported on Wednesday.

The Department of Trade and Industry told the newspaper that amendments to the broad-based BEE Act, aimed at shifting its focus from equity deals to enterprise development, will be tabled in Parliament by July.

BEE is designed to widen ownership of the South African economy, which is still mainly in white hands 17 years after the end of apartheid.

A number of global and local firms have sold portions of their local units to black investors to meet the regulations.

Some BEE deals have been criticized by unions and opposition politicians who say they benefit a small group of politically connected black businessmen to the exclusion of the vast majority of poor black South Africans.

The amendments would seek address criticism that BEE was only creating a class of passive black shareholders rather than entrepreneurs actively engaged in economic activity.

The amendments would also be in line with the government's efforts to promote initiatives aimed at enhancing production and bolstering growth in South Africa.

Last month, Microsoft South Africa, a unit of the world's largest software firm, said it will invest R475m in four black-owned software firms to meet BEE rules.

The deal was in place of selling a stake to black investors, which is the route usually taken by most foreign and local firms in Africa's biggest economy.