- Application of and
Approach to King III
- Status: New Companies Act
- Business Ethics Statement
- Compliance Framework
- The Board
- Board Committees
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- Internal Audit
- Non-Audit Services
- IT Governance
- Company Secretary
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- Closed Period
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- Direct Empowerment
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- Regulatory Environment
Broad-based black economic empowerment (BBBEE)
Through a combination of shareholding in Naspers and the Phuthuma Nathi share schemes, black South African individuals and groups own 30% of MultiChoice South Africa. The Phuthuma Nathi 1 and 2 share schemes were launched in 2006 and 2007 respectively. Since inception, the share schemes have received over R1bn in dividends and were used to reduce debt. As the debt is reduced, the value of Phuthuma Nathi grows.
In terms of the scheme rules, Phuthuma Nathi shares can be traded after a five-year lock-up period. The lock-up period for Phuthuma Nathi 1 ends in December 2011 and for Phuthuma Nathi 2 in March 2012.
At launch, MultiChoice announced it would use its best endeavours to provide a trading platform for Phuthuma Nathi shares once the five-year lock-up period ends. We are developing such a platform.
In 2006 Media24 launched the biggest BBBEE share offer in the print media industry, Welkom Yizani, resulting in eligible black people and groups owning some 25% (directly and indirectly) in Media24 Holdings. In December 2009 to mitigate the impact of the recession on the value of these shares, Naspers wrote off R330m of its funding in Welkom Yizani and the scheme was extended by two years to December 2013. This proactive step has given Welkom Yizani shareholders a better opportunity to profit from their original investment.
Black economic empowerment partners
Media24, MultiChoice and other group companies have combined their buying power in South Africa in a centralised bargaining company, CommerceZone. Suppliers’ BEE performance is evaluated against specific criteria and they are expected to boost their annual BEE rating.
The MultiChoice preferential procurement programme supports the development of small, medium and micro enterprises (SMMEs). In addition, these SMMEs are given opportunities to tackle larger-scale projects, enabling entrepreneurs to develop their skills and capabilities. The last three years have seen a lifting of MultiChoice’s preferential procurement spend – from 47% in 2009 to 87% in 2011 on BEE-compliant companies. This equates to over R4bn spent with BEE-compliant companies.
In addition to its own empowerment initiatives, MultiChoice buys large numbers of decoders from a local manufacturer. This has created employment opportunities in the areas of manufacture, logistics and sales. MultiChoice has 113 agencies, all owner-managed businesses. About 28 of these are owned by black individuals. R24m was invested in this project in the past year.
Furthermore, enterprise development initiatives have created more than 1 500 jobs across the Paarl Media group.