Listed companies whose empowerment share schemes have come out of their lock-in periods have largely shunned the JSE’s black economic empowerment (BEE) trading platform for their own options.

The stock exchange’s BEE platform, launched in February, lists only Sasol’s cash offer component of the Inzalo share scheme and has experienced little uptake of trading, because it is considered more rigid and onerous to use this platform instead of simpler, tailor-made options presented to companies.

In the latest snub, MultiChoice, a subsidiary of listed media giant Naspers, chose not to list its Phuthuma Nathi share scheme on the JSE’s platform on Thursday when its lock-in period ended. Instead, it decided on an over-the-counter platform through which investors can trade their shares at MultiChoice’s offices or online.

“We investigated the JSE option but it was decided over-the-counter trading was the best option,” said MultiChoice chairman Nolo Letele. He said MultiChoice wanted the scheme to be “truly broad-based” and did not want any individual or group to hold more than 10% ownership, and the JSE could not offer that.

African Bank’s BEE share schemes, Hlumisa and Eyomhlaba, also opted not to trade on the exchange’s platform. The bank wanted to limit sales to persons, as opposed to companies, and implement phased vesting — when shareholders may sell only a third of their shares in each of three years after 2011.

Brett Kotze, GM of the JSE’s clearing and settlement division, confirmed that the biggest concern was that the exchange could verify BEE compliance, but it could not stop individuals from buying 30% to 40% of the shares. For this reason, it had been criticised for not being broad-based enough.

BEE share schemes have become a popular way for companies to share wealth among ordinary black South Africans and push up their scorecards. These schemes, many of which were initiated after the introduction of the BEE codes of good practice in 2007, have lock-in periods of sometimes up to 10 years before they can be traded.

The JSE had anticipated that other schemes would list on its BEE exchange as lock-in periods ended. Setting up and operating such a platform is a costly exercise, although Sasol did pay 20% of the development cost.

Kotze said the BEE share-trading facility worked in the same way as the main board, except that monitoring was more intensive because the shares were only available to BEE-compliant persons.

“It’s quite a manually intensive process to verify each listing on the BEE platform,” he said. — Lisa Steyn, Mail & Guardian