Computer Sciences Corporation SA (CSCSA) is taking the first steps to allow an equity stake of 25%, or more, to be placed in black business hands, says MD Martin Vergunst.
While this may at first glance seem to be contrary to the majority of US-owned corporations` stance of rejecting a black economic empowerment (BEE) shareholding in their South African operations, Vergunst says this is more of a pragmatic step in ensuring the long-term survivability of the US-owned outsourcing company in the country.
"The possible BEE stake has been placed on the agenda of CSC`s head of mergers and acquisitions in Los Angeles (CSC`s corporate headquarters). During the next two months we will start negotiating with potential partners and hopefully we will have the whole process wrapped up by the end of our fiscal year in March 2005," says Vergunst.
CSCSA is the first US subsidiary to have announced it is going this route. Vergunst and his company have taken a different view of BEE from most US corporations represented in SA, many of which have been less than enthusiastic about the concept.
"The big difference is that we are a services organisation, while many of the others are product-oriented. As a services group, we have to ensure we have a continuity of contracts," he says.
Vergunst recently presented at a conference in New York where he explained the BEE concept to mainly US business people who have been sceptical about what the process means and the business imperative for it.
"I am strongly of the opinion that if SA is going to be a global competitor, then we have to ensure that our people have the correct skills and motivation to do so. That means that economic empowerment is an imperative."
He says overseas business people are beginning to become aware that BEE is not only about giving away equity. Rather it is broader based and includes issues such as supply contracts, education and training.
Vergunst says his preference would be to have a BEE partner who will be operationally involved in the company and so bring value in terms of management skills, technology and clients.
"The problem with a passive investor is that it includes third-party funding that can be very problematic," he says.
CSCSA has been involved in the process of creating the BEE ICT charter, which is in its final drafting stage.
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