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

Amended Codes of Good Practice (2017)

Amended Code Series CSC100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment in the Construction Sector

Statement CSC100: The General Principles for Measuring Ownership

3. Key Measurement Principles

3.8 Recognition of Ownership after the Sale or Loss of Shares by Black Participants
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3.8.1 A 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:
3.8.1.1 The Black Participant has held shares for a minimum period of 3 years;
3.8.1.2 Net value based on the Time Based Graduation Factor as per annexe 100 (E) must have been created in the hands of Black People and;
3.8.1.3 Transformation 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. The minimum transformation required is a B-BBEE status level 6 and that the score must have improved since the last verification.

 

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

 

3.8.3 A written agreement between the Measured Entity, the Black Participant and, where applicable, a lender must record the original terms of the ownership transaction and any related financing arrangements, where applicable

 

3.8.4 In the case of a loss of shares by the Black Participant, the following additional rules apply:
3.8.4.1 In the case of a listed company or a company that is wholly owned by a listed company the period over which the continued recognition points are allocated or recognised after the loss of shares will not exceed the period over which the shares were held.
3.8.4.2 In the case of a company that is not listed the period over which the continued recognition points are allocated or recognised after the loss of shares will not exceed one measurement period.

 

3.8.5 The Ownership points under this paragraph that are attributable to the Measured Entity will be calculated by multiplying the following elements:
3.8.5.1 The percentage of rights of Ownership for each of the indicators in the Ownership scorecard that were attributable to the Black Participants immediately before his or her sale or loss of shares;
3.8.5.2 The Deemed Value percentage provided for in paragraph 3 of Annexe CSC100(E) undertaken for the Equity Instruments sold or lost by the Black Participant on the date of the sale or loss. The value of the Entity is measurable as at the date of sale or loss of shares; and
3.8.5.3 The most recently determined B-BBEE Recognition Level of the Measured Entity (which must be less than 1-year old) based on its applicable Scorecard result for all Elements other than Ownership determined using statement 000.