Ownership benefits of broad-based Black Economic Empowerment share purchase schemes

M.Com. (Business Management)Abstract: In 2004, the Black Economic Empowerment (BEE) Act was promulgated to deracialise the economy and address inequalities of the past. The South African government introduced Broad-based Black Economic Empowerment (BBBEE) Codes of Good Practice in 2007 to broaden the benefits of this programme. The main pillars of this legislation include ownership, management control, employment equity, skills development, preferential procurement, enterprise and socio-economic development. As a result of these codes, many organisations in the private sector have introduced share schemes for a variety of reasons. This study focuses on the ownership element of BBBEE codes in an effort to determine benefits derived from the share purchase schemes between 2004 and 2016 in three share purchase schemes in the Telecommunications sector: Vodacom Yebo Yethu, MTN Zakhele and Telkom Khulisa. A mixed method research approach was used in the research. Semistructured interviews were conducted with managers of shared scheme vendor companies for qualitative research. For the quantitative research, a sample of 119 respondents of past and present beneficiaries from the mentioned companies was selected to determine the benefits that purchase scheme owners received. The statistical analysis included reliability analysis; frequency distributions, cross-tabulation, factor analysis, and Chi square (x2) test. The main findings of the study indicate that the beneficiaries of the schemes in the Telecommunications sector benefited financially through the ownership of the shares. The participation in investment activities of the beneficiaries in the management of the schemes still lacks. From the early results the picture is promising that through shared ownership, the beneficiaries are set to participate in the mainstream of the economy. This research can be a beneficial guide to government and private sector. It could assist government and its agencies to track progress of these equity schemes and take corrective..