Horse racing and tote-betting operator Phumelela's black economic empowerment (BEE) achievements have been significant. During 2004, the National Gambling Board conducted an audit of BEE in the gambling industry and as part of this process, Phumelela was required to make submissions and presentations to the BEE audit committee. BEE groups have a direct equity stake of 27,5% in the company. The major portion of the loans raised to finance the stake has been facilitated by means of dividends.
The empowerment shareholders in Phumelela's shareholding are a consortium of broad-based groups, including the Sports & Recreation Trust and the National African Federated Chamber of Commerce & Industry. The other major shareholder, the Racing Trust, which owns 35% of Phumelela, is not strictly an empowered entity as it is an industry body. Still many of its initiatives are aimed at achieving transformation in the industry.
The Racing Trust runs a training programme aimed at trainers, most of whom are black, at its major racecourses in Gauteng and the Free State.
The aim of the "work rider" programme is to improve the skills of trainers and give them the opportunity to increase their earning potential. A secondary aim is to find trainers who display the necessary talents to become professional jockeys.
Two work riders - Petrus Ndhlovu and Louis Nhlapo - have been granted special apprentice licences by the Jockey Club, which means they can ride in all races, providing them with the opportunity to become professional jockeys.
About 74% of the group's employees are from historically disadvantaged backgrounds. Interestingly, though, it does not feature in the top 10 of the management rankings. There are only two black males among a total of eight senior managers. Three of its nonexecutive directors are black, including board chairman Peter Malungani, who is head of Peu Investment Group.
The company has made significant progress in employment equity at junior management level despite limited recruitment opportunities due to declining staff numbers in the past few years. More than 80% of the company's retail outlets are managed by black managers and most of those are women. As with many other organisations, management says the biggest challenge is fast tracking blacks to middle and senior management.
There is a transformation committee examining the creation of an internal charter.
An area in which the group performed well is affirmative procurement. Phumelela has an affirmative procurement policy in place and spends nearly 60% of its buying power on affirmative procurement.
Phumelela and its BEE shareholders are examining means by which shareholders who wish to sell their equity can do so, while at the same time preserving empowerment within the group.
