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Electronic Communications Act, 2005 (Act No. 36 of 2005)

Regulations

Amendment Regulations in respect of the Limitations of Control and Equity Ownership by Historically Disadvantaged Groups (HDGs) and the application of the ICT Sector Code, 2021

Appendices

Appendix 1: Methodology to be used to compile Credible Assurance Report

2. Assessing Compliance with the HDG Equity Requirement

 

2.1 In order to determine whether an Individual Licensee has complied with the HDG Equity Requirement, the Authority will consider the Individual Licensee’s shareholding structure to ascertain whether:
2.1.1 A minimum of 30% of the total ownership equity in an Individual Licensee is held by:
2.1.1.1 Black People;
2.1.1.2 Women, who are citizens of South Africa;
2.1.1.3 People with disabilities, who are citizens of South Africa; and/or
2.1.1.4 Youth, who are citizens of South Africa.
2.1.2 The persons referred to in clause 2.1.1 who own equity in an Individual Licensee are afforded full unlimited and unrestricted shareholder/ownership rights associated with holding ownership equity in an entity. These shareholder rights include the right to attend and vote at shareholder meetings and director meetings (through appointed directors, if applicable) and the rights to share in the Individual Licensee’s economic interest and realise capital growth.

 

2.2 The Authority acknowledges that the Individual Licensee may not have persons referred to in clause 2.1.1 holding ownership equity directly in the Licensee. Such persons may hold their ownership rights indirectly through some form of an entity such as a company, closed corporation, trust or any form of juristic person recognised under South African law.

 

2.3 Notwithstanding clause 2.2, the Authority will only consider the indirect ownership equity held by persons referred to in clause 2.1.1 together with ownership rights afforded to them when determining compliance with the HDG Equity Requirement.

 

2.4 The required ownership equity and ownership rights will be determined across every tier of ownership of a multi tiered chain of ownership until that chain ends with a person from the group of persons set out in clause 2.1.1.

 

2.5 The required ownership equity and ownership rights will be determined by multiplying the ownership equity held by each person from the group of persons set out in clause 2.1.1 in juristic persons through which those rights pass by the percentage of the rights of ownership of each juristic person to the Individual Licensee.

 

2.6 Clause 4 demonstrates the application of the principles set out in clauses 2.3 to 2.5 which will be used by the Authority to determine compliance with the HDG Equity Requirement through indirect ownership.