Reunert BEE benefits only 'filthy rich'

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 08 Feb 2007

The National Union of Metalworkers of SA (Numsa) is seeing red in the aftermath of Reunert's R1.1 billion black empowerment deal with Rebatona Investment Holdings, announced at the ICT giant's annual general meeting on Tuesday.

The transaction will see black interests take a 9.5% stake in the company. Numsa national information officer Mziwakhe Hlangani says the deal primarily benefits the country's "four richest women".

Reunert is one of the largest companies on the JSE Securities Exchange. It owns Nashua, among other assets, and has a 40% stake in Siemens Telecommunications.

Numsa also threatened Reunert with industrial action should the deal not be called off. "Numsa is strongly calling on Reunert's CE Boel Pretorius to intervene and reverse the transaction, before we mobilise our members in the company and its subsidiary CBI to publicly protest," Hlangani adds. "We want to see disempowered workers ... getting a fair share in this particular transaction rather than distributing them to the filthy rich four businesswomen."

However, Pretorius says only 30% of the BEE stake - or about 3% of Reunert's issued shares - is going to former ANC deputy secretary general Cheryl Carolus, one-time Spoornet chief executive Dolly Mokgatle, ex-CCMA director and labour lawyer Thandi Orleyn and previous FirstRand retail division CE Wendy Lucas-Bull.

He adds this is one of the best empowerment deals ever constructed and those who think differently are na"ive. "You can't do empowerment with people who are not experienced," he says.

Carolus, Mokgatle, Orleyn and Lucas-Bull are all directors of Peotona Group Holdings, which has a 26% share in De Beers Consolidated Mines. It also has interests in gold mine Western Areas, a 25% stake in Fenner SA, a Gauteng-based conveyor and conveying equipment manufacturer, a 10% share in the IQ Business Group, 4.4% of Lafarge Mining and 1.5% of Lafarge Industries. Lafarge is in the cement manufacturing business.

The quartet will pay for the shares over 11 years, using Reunert dividends. Business Day speculated that Carolus' shares would be worth R135 million at current value, "while Mokgatle and Orleyn each stand to get shares now worth R130 million, and Lucas-Bull stands to get shares now worth R70 million".

Pretorius comments it would be wrong to place values on the stock as "the shares are worth absolutely nothing today" and will have value only once they are paid for in a number of years.

Pretorius separately says the shares would be valueless to the four unless they make the empowerment trust work. "If they don't do it, they lose everything. That is why you need people who are credible and who have a track record. You can't just go pick partners off the street."

The deal will also see Orleyn join the Reunert board.

Pretorius adds the company will donate 600 000 new ordinary shares to the Reunert Staff Share Trust as part of the deal. Each qualifying employee will receive 100 shares. He says this will increase employee ownership of the company to 0.3%. "We made sure that everyone, black and white, will benefit from this deal."