Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Amended Codes of Good Practice (2013)

Amended Code Series 100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 100: The General Principles for Measuring Ownership

Key measurement principles

3.8 Recognition of Ownership After the Sale or Loss of Shares by Black Participants
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3.8Recognition of Ownership After the Sale or Loss of Shares by Black Participants

 

3.8.1A Measured Entity is allowed to recognise a portion of Black Ownership after a Black participant has exited through the sale or loss of shares subject to the following criteria:

 

3.8.1.1the Black participant has held shares for a minimum period of 3 years;

 

3.8.1.2net value based on the Time Based Graduation Factor as per annexe 100 'E' must have been created in the hands of Black people; and

 

3.8.1.3transformation has taken place within the Measured Entity using the B-BBEE Recognition Level from the period of entry of black participants to the exiting period.

 

3.8.2Black participation arising from continued recognition of Black Ownership cannot contribute more than 40% of the score on the Ownership scorecard.

 

3.8.3In the case of a sale or loss of shares by the Black participant, the following additional rules apply:

 

3.8.3.1a written tripartite agreement between the Measured Entity, the Black participant and a lender must record the loan or security arrangement, unless the Measured Entity is the lender; and

 

3.8.3.2the period over which the continued recognition points are allocated or recognised after sale or loss of shares will not exceed the period over which the shares were held.

 

3.8.4The Ownership points under this paragraph that are attributable to the Measured Entity will be calculated by multiplying the following elements:

 

3.8.4.1the value created in the hands of Black participants as a percentage of the total value of the Black participants' shareholding in the Measured Entity at the date of sale or loss of shares;

 

3.8.4.2the B-BBEE status of the Measured Entity based on the balanced scorecard at the Date of Measurement; and

 

3.8.4.3the Ownership points that were attributable to the Measured Entity on the date of sale or loss shares.