It should not be a surprise that Hosken Consolidated Investments (HCI) has emerged in the 2007 Top Empowerment Companies (TEC) rankings with the most respectable black ownership record on the JSE.
The group claimed all 20 points allocated to the ownership element of the broad-based black economic empowerment (BEE) generic scorecard.
Though two other groups, Bidvest and Glenrand MIB, also claimed maximum ownership points, HCI took the leading position through superior voting rights and economic interests, both of which were quoted at 54% in the data provided by BEE rating agency Empowerdex.
Bidvest and Glenrand MIB, which made a surprise appearance in second and third position respectively on ownership, are of a different ilk. The two are formerly white companies in the process of transforming themselves.
HCI, in contrast, is a BEE group that has grown itself into the corporate mainstream.
HCI's longstanding broad-based BEE credentials can be matched by few players in SA. The group, led by former trade unionists Marcel Golding and Johnny Copelyn, was established in the name of the SA Clothing & Textile Workers Union (Sactwu).
While Copelyn and Golding together hold about 25% of the company, Sactwu controls more than 40% of HCI's issued shares. The group maintains an elaborate corporate social investment initiative through its HCI Foundation.
That augu rs well within the new BEE legislative framework. Drafters of the framework at the department of trade & industry (DTI) have been guided by the principle of broad-based BEE.
This followed a national outcry that BEE had been hijacked by a few individuals who hogged many BEE equity transfer deals and became multimillionaires overnight.
Polo Radebe, the DTI's director of BEE, says the codes are designed to provide specific incentives in the ownership scorecard to ensure participation of black women, black designated groups and new entrants. The codes are meant to ensure that real economic interest is delivered to the hands of black people, says Radebe.
This is taken care of through a principle called "realisation point", carried under the ownership element of the BEE scorecard. This portion of the ownership element comes with a maximum of seven points.
A total of nine points accrues to BEE ownership structures which are diligent in terms of the broad-based BEE principle.
The fact that HCI was able to claim maximum ownership points is telling. Established in 1997 through a reverse listing of assets put together under the Sactwu investment arm, HCI has grown into a formidable BEE company. With a portfolio dominated by media and entertainment assets, HCI has also done well operationally, boosting the net asset value due to its black shareholders.
HCI's revenue has swelled to more than R2,1bn as quoted in the year ended June 2006. Its share hit a record high of R62 in January.
