Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Industry Charters

Information and Communication Technology (ICT) Charter

ICT Sector Code for Black Economic Empowerment

Code Series 100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 102: Recognition in the Sale of Assets

3. Key Measurement Principles

Purchase

3.1	General principles:

3.1.1

A Seller that has concluded a transaction involving a sale of asset, Equity Instrument or business with an Associated Enterprise may claim the benefits provided for in this statement in its own Ownership Scorecard.

3.1.2

Where a Seller has claimed benefit in terms of the Ownership scorecard for the Sale of Asset, Equity Instrument or Business it may not claim benefits under the Enterprise Development Element.

3.2	Qualification Criteria:

3.2.1

For Ownership points to be recognised the transaction:

3.2.1.1

Must result in the creation of sustainable businesses or business opportunities in the hands of black people; and

3.2.1.2

Result in the transfer of specialised skills or productive capacity to black people.

3.2.2

A Sale of Asset, Equity lnstrument and Business must involve a separate Associated Enterprise which has:

3.2.2.1

No unreasonable limitations as to its clients or customers; and

3.2.2.2

Clients, customers or suppliers other than the Seller.

3.2.3

Any operational outsourcing arrangements between the Seller and the Associated Enterprise must be negotiated at arms-length on a fair and reasonable basis.

3.2.4

The following transactions do not constitute Qualifying Transactions:

3.2.4.1

transfers of business rights by way of license, lease or other similar legal arrangements not conferring unrestricted ownership: and

3.2.4.2

sales of franchises by franchisors to franchisees, but includes sales of franchises from franchisees to other franchisees or to new franchisees.