Vodacom has admitted its YeboYethu public shares offer - which forms part of its R7.5 billion BEE deal concluded earlier this year - is a means to achieving "acceptable BEE credentials", rather than for the upliftment of poor South Africans.
Responding to accusations by Solidarity trade union that the public offer is racially exclusive, Vodacom said the public offer being managed by YeboYethu uses the same requirements as its broad-based BEE deal, and would, therefore, exclude poor white South Africans from applying.
"These requirements extend to the YeboYethu public offer and we, therefore, can only invite black people and black groups, as defined by [the DTI] codes, to participate," it says.
The company adds that both the BEE deal and the public offer "reflect a commercial imperative", which the company clarifies as a means to gain the correct credentials for government and business participation.
"Vodacom sells products to businesses, government and groups which require the presentation of acceptable BEE credentials. Vodacom's broad-based BEE transaction was, therefore, structured to comply with the requirements set out in the Department of Trade and Industry BBBEE Codes of Good Practice, which govern BEE in SA," says the company in its response.
Vodacom spokesman Dot Field said in March, when the Communication Workers Union raised concerns that white people would be allowed to participate in Vodacom's public offer that: "All South African employees - black, Asian, Indian, white, male and female - will participate in the BEE transaction." Vodacom says the Employee Share Offer - separate to shares held by YeboYethu, but managed by it - is where all employees will benefit.
At the inking of the deal, the company explained the structure the YeboYethu public offer would take.
The deal
Black people, black-controlled groups and Vodacom SA's black business partners can participate in the black public offer, it stated. Some 14.4 million YeboYethu shares will be available for subscription by the black public.
Of this, 3.6 million YeboYethu shares were to be reserved for Vodacom's black business partners, who are black entities forming part of Vodacom SA's distribution network and which had been invited by Vodacom to participate in the offer.
All of Vodacom's South African staff members were to participate through the YeboYethu Employee Participation Trust (ESOP). The current market value of the ESOP stake is R1.875 billion.
Allocation to employees would have been based on percentage of salary, with the lower paid employees getting a higher percentage. "It is a condition that 70% of the ESOP must be in black hands and 30% in black women's hands. A further 25% will be held for future employees."
Solidarity's challenge
Solidarity chairman Dr Dirk Hermann says the company's response reflects its "moral standing".
"If Vodacom was driven by a real belief in empowerment, they would not exclude anyone. The company's reaction is serious, because they have admitted it's only about the scorecard."
Solidarity has challenged Vodacom to refuse applications of poor whites to buy the cellphone giant's YeboYethu shares. The union has also asked its civil rights initiative, AfriForum, to support whites who apply for shares.
Hermann says if the company denies the applications, AfriForum will look into a legal route. "We will try them in a moral court and we will try them legally. They will fail in the moral court if they deny the applications."
The union quotes a report by political analyst and academic professor Lawrence Schlemmer, which estimates that almost 10% of white South Africans had become too poor to live in "traditionally white" areas.
"The increase in poverty among white people has been ignored by the government to an almost total extent," says Solidarity.
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