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Black ownership of shares in South Africa’s 60 largest listed companies stood at just R255bn at end-December 2024, equivalent to 6.9% of the South African assets held by those companies, according to a new report by economist Duma Gqubule for the Black Management Forum. The figure stands in stark contrast to the BEE commission’s 2022 finding that JSE-listed companies had average black ownership of 39%, a discrepancy the report attributes to fatal design flaws in the BEE codes that allow companies to inflate their scores by counting passive pension fund holdings and claiming credit for black shareholders who have long since exited.The gap between paper compliance and reality is illustrated by two examples in the report, including Pick n Pay, which has not concluded a BEE transaction but carried a 2025 BEE certificate showing 22% black ownership. Nedbank disclosed actual black ownership of 0.6% in its 2024 annual report, while its BEE certificate showed 36.59%. The report traces the distortion to three policy concessions extracted by large companies during the drafting of the codes, including a provision that allows the Public Investment Corporation’s (PIC) R1.1-trillion shareholding in JSE Top 60 companies to flow through as black ownership credit to companies that have done little to transform their own share registers.‘Back-door route’“Recognition of indirect ownership means that companies get free points and full compliance in many cases, even if they do nothing to transform their ownership structures — a major contributor towards inflated scores of JSE-listed companies. “A back-door route towards compliance rewards companies for doing nothing.“Allowing passive indirect ownership to count is a betrayal of the spirit of true empowerment, which is to encourage direct ownership by active black shareholders who can influence company strategies. “There are weak incentives for companies to get into replacement BEE transactions.”The report recommends a comprehensive overhaul of the BEE legislative framework, including scrapping the mining sector’s once empowered, always empowered principle; closing the indirect ownership backdoor; and establishing a state-backed super fund involving the Reserve Bank, the PIC and the IDC to finance new black acquisitions of listed company shares. Two-thirds of existing black ownership on the JSE is held through broad-based schemes, including employee trusts, community funds and public retail schemes such as MultiChoice’s Phuthuma Nathi, which has paid R19.6bn in dividends to 73,791 shareholders since 2006, countering the narrative that BEE has benefited only a politically connected elite.“The biggest myth is that BEE has only benefited the politically connected few. While politicians such as President Cyril Ramaphosa and former Gauteng premier Tokyo Sexwale benefitted from earlier BEE deals, an analysis of the current composition of black shareholders within the JSE Top 60 companies shows that this is no longer true,” the report reads.
