10 March 2006
	OWNERSHIP Merit IN BRINGING more women ON BOARD By Larry Claasen Paracon wins on compliance with guidelines on financial sustainability and ownership by women

Guidelines presented by the department of trade & industry in its codes of good practice on empowerment mean that it is no longer enough only to bring in black partners as shareholders to increase the empowerment ranking of a business. The codes give more points if an empowerment deal advances the ownership of black women and is financially sustainable. The guidelines on ownership by women and financial sustainability are just two reasons technology company Paracon has come out tops in terms of ownership in this year's Top Empowerment Companies rankings. Paracon's rise follows the recognition of the 25,1% stake women's empowerment group WDB Investment Holdings (WDBIH) took in the IT services group in 2003. Ownership counts for 20% of the score on the empowerment ranking, according to the codes; Paracon scored 19%. The emphasis on ownership by black women means that it is no longer sufficient for a company to have a black partner holding a 25% stake to perform well on the rankings. Paracon is not the only technology company to score well on ownership. Paracon, computer manufacturer Mustek and diversified technology companies GijimaAST and Bytes Technology Group make up the top four on the ownership ranking. It is understandable that technology companies are keen to bring in black partners, given the pressure on them to be in compliance with the information & communications technology (ICT) industry's draft empowerment charter, says Mrinal Patel, a researcher at Empowerdex. Patel says the rankings show more companies have realised the importance of bringing in black women as partners. An example of this trend is WDBIH's holding in two of the top 10 companies on the ownership ranking, with diversified services group Bidvest coming in at number five. WDBIH is part of the Dinatla consortium that "bought" a 15% stake in Bidvest, worth R2,1bn in 2003. The structure of the deal has, however, drawn criticism, in spite of Dinatla having full voting rights in Bidvest. The deal involves Dinatla having the right to buy Bidvest shares at a R60 strike price by October this year. The deal was done when the share price was R42. It is now at R96. Absa group executive director Israel Skosana said last year that three years was not enough time for Dinatla to create wealth. He told Business Day that Dinatla may need to sell its Bidvest shares to settle the purchase price, thereby diluting black shareholding. Bidvest is the largest of SA's big corporations to feature in the top 10 of the rankings. Kumba Resources is the only mining company included in the top 10 of the ownership rankings, and none of the country's large banks made it to the top 10. When it comes to bringing in a black partner, large companies are at a disadvantage. Patel says concluding an empowerment deal is not only expensive for them, but they struggle to find black-owned businesses in their sector with which to conclude a deal.