`Charter hopping` not possible

By Itumeleng Mogaki, ITWeb junior journalist

Johannesburg, 13 Dec 2005

The Department of Trade and Industry (DTI) says companies cannot hop from one sector to another to find the most beneficial empowerment charter, as companies have to use their core business as a guide to which industry charter governs their equity targets.

This comes after a meeting last month organised by industry associations, including the Electronics Industry Federation (EIF), the Communications Cabling Association of Southern Africa (CCASA) and the Black IT Forum.

Certain industry players at the meeting raised fears of "charter hopping", described as switching between industry sectors to find the most beneficial black economic empowerment (BEE) charter.

The outcome of the meeting was that the industry would forward issues and concerns raised to the DTI`s director of BEE, Jeffery Ndumo.

Ndumo, who says he was absent from the meeting due to "miscommunication" between him and the organisers, says the industry has not sent any questions or queries to the DTI.

Issues raised at that meeting included the exemption of small and medium enterprises (SMEs), equity targets, multinationals, rating agencies and charter hopping.

"With regards to charter hopping, no business will have a choice as to which charter to follow," Ndumo says. "Instead, equity targets to be followed by an organisation are determined by their core business.

"That should not even be an issue as long as equity targets provided in that specific charter are objective and rational, that`s all that counts."

Ndumo dismisses speculation that the second phase of the DTI codes may take up to three years before completion. He says the department will release the second-phase codes by the end of this year.

"After the release of the first set of codes, the ICT industry specifically was satisfied with the codes, and notified us that the industry would await the complete codes before finalising the ICT charter," says Ndumo.

He says it was clearly communicated to the industry that issues around SMEs would be addressed in the second phase of the DTI codes.

"The second-phase codes will address issues related to SMEs. The codes will be available to the public domain and it is anticipated that they will be completed by mid-next-year, before they are submitted for endorsement by the cabinet," says Ndumo.