logo
Cosatu, BBC slam Elon Musk's R2 billion investment plan to avoid BEE

Cosatu, BBC slam Elon Musk's R2 billion investment plan to avoid BEE

IOL News03-07-2025
Cosatu has slammed Minister Solly Malatsi's attempt to bypass South Africa's 30% local ownership law, purportedly for Elon Musk's Starlink.
Image: AP Photo/Francois Mori
The Congress of South African Trade Unions (Cosatu) has expressed concerns over the proposed policy direction on equity equivalent investment programmes (EEIPs) in the Information and Communications Technology (ICT) sector.
Communications and Digital Technologies minister Solly Malatsi gazetted a policy direction on the role of EEIPs in the ICT sector, aiming to provide policy certainty and attract investment.
The policy direction allows companies to meet empowerment obligations through alternatives to 30% ownership, such as investing in local suppliers, enterprise development, and job creation according to Malatsi.
However, Cosatu spokesperson Matthew Parks, said the Broad-Based Black Economic Empowerment (BBBEE) Act provides two options for investors that include a 30% shareholder option or an equity equivalent option.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
The trade federation giant believes that the BBBEE Act is inclusive and provides accommodating options for all investors and not only for the wealthy.
The federation is concerned that the proposed policy direction might allow companies like Starlink to bypass BBBEE requirements.
"It's critical that Starlink, like all other investors, comply with the BBBEE Act, whether it is the shareholder or equity equivalent option," Parks emphasised.
The BBBEE Act requires companies to offer 30% shareholding opportunities to historically disadvantaged individuals or offer equity equivalents, such as supporting local manufacturers, creating jobs, upgrading worker skills, or investing in local communities.
Parks cited examples of companies like IBM and Microsoft that have utilised the equity equivalent option.
Cosatu argues that exempting one company from BBBEE requirements would be unfair.
"It would not be sustainable to exempt one company as this would be unfair to other companies and undermine the law," Parks said.
Cosatu proposes that the government ensures BBBEE reaches those who most need empowerment, namely workers and working-class communities.
The federation advocates for worker empowerment through Employee Shareholder Ownership Programmes and support for locally produced goods.
The Black Business Council's (BBC) spokesperson Masedi Sesele also shut down the idea saying it would be 'bending of legislation' to accommodate an individual or company.
'Legislation is there for all to comply with, no exception. Otherwise, the country will become lawless…The BBBEE legislation together with the Codes of Good Practice prescribes that any company wanting to do business in South Africa should implement all the elements of the BBBEE codes being ownership, management control, skills development, enterprise and supplier development, and socio-economic development. We don't know how the rumoured R2 billion is going to implement those important elements.
'Anyone who wants to invest in any country must comply with the ownership legislation of that country. This is happening worldwide and is not unique to SA. So BBBEE regulations should never be exempt. Black people, who constitute 97% of the population and own only 3% of the economy, can't continue to be sidelined in the name of foreign investments,' said Sesele.
Malatsi through his spokesperson Kwena Moloto said that the policy direction sought to provide the 'much-needed' policy certainty to attract investment into the Information and Communication Technologies (ICT) sector, and specifically with regards to licensing for broadcasters, internet service providers, mobile networks, or fixed and mobile networks.
Communications and Digital Technologies Minister Solly Malatsi defends ICT policy, denies special treatment for Starlink, and stresses the need to align sector regulations with transformation laws through equity equivalent investment options.
Image: X/IOLGraphics
Moloto, on Thursday, saidthat Starlink was not the only company being considered.
Starlink, owned by Elon Musk, reportedly plans to launch its services in South Africa ahead of the G20 conference.
However, the company intends to bypass the BBBEE law and its 30% ownership requirement, preferring instead to go the Equity Equivalent Investment Programme route where they have offered to invest R2 billion.
Political parties such as the EFF, the African Transformation Movement (ATM) and the uMkhonto weSizwe Party (MKP) have been opposed to the proposed changes, citing concerns about Starlink's compliance with BBBEE laws.
Political analyst Professor Sipho Seepe criticised the government and president Cyril Ramaphosa for 'forging ahead' with allowing Starlink to operate in South Africa, saying it would set the wrong precedent..
'The imbroglio regarding Starlink is further proof that South Africa is up for sale under the Ramaphosa administration. This is what you should expect when you have a prepaid presidency.
'Every penny given to support his presidential candidacy was a future investment to ensure that the South African government would succumb to business demands…The very fact that the Ramaphosa regime is willing to suspend legislation and regulations for pieces of silver is not only shameful but also points to a lack of conviction and commitment by the ANC elites...Succumbing to the demands of Starlink would set the wrong precedent and open the floodgates by like-minded business people,' Seepe said.
mashudu.sadike@inl.co.za
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

'We'll never allow it': EFF vows to 'stop' Starlink in SA
'We'll never allow it': EFF vows to 'stop' Starlink in SA

The South African

timea day ago

  • The South African

'We'll never allow it': EFF vows to 'stop' Starlink in SA

The Economic Freedom Fighters (EFF) have doubled down on the rejection of Starlink being granted a licence to operate in South Africa. This comes after Elon Musk's internet satellite service company is reportedly planning to 'work around' the country's Black Economic Empowerment (BEE) policies, which require a stake in local shareholding for foreign investors. Musk has repeatedly slammed the transformative legislation as a 'racist law', he claims discriminates against him as he is 'not black'. Addressing parliament on Friday, 11 July, EFF spokesperson Sinawe Thambo rejected Minister of Communications and Digital Technologies Solly Malatsi's plan to introduce equity equivalent investment programmes (EEIPs) as an alternative to transformative legislation like BEE. He said: 'This is a proposal we've objected to because the so-called alignment would require an amendment to legislation. And can't be achieved through a ministerial policy directive.' Elon Musk's plan to launch Starlink in South Africa has been met by heavy opposition. Images via X: @starlink Referring to Starlink creator Elon Musk, Thambo continued: 'We will never allow Starlink, which has weaponised misinformation and captured the White House, to erode US and South African diplomatic relations in order to ease business access in South Africa. 'We view that as economic and diplomatic terrorism. Even if Starlink were to meet equity equivalence requirements, there's a security threat that it poses. That means it must never be allowed to operate in South Africa. And we will never allow it to do so'. In May, Minister of Communications and Digital Technologies Solly Malatsi gazetted a policy direction for his department on EEIPs, which are considered 'alternatives' to transformative legislation. Without mentioning Starlink, the minister claimed that the policy would 'attract investment,' specifically in operating licensing. The minister revealed that current legislation for foreign investments 'did not allow companies to contribute to transformation goals in ways other than traditional ownership'. Last month, Business Day reported that Starlink, which falls under SpaceX, is looking to invest over R2 billion in South Africa as part of its prospective deal to operate in the country. The internet satellite company will reportedly finance infrastructure to support the Southern African Development Community (SADC), which is made up of 16 countries. The move is thought to be a way to 'work around' local BEE policies, which require foreign investors to hold 30% of the local shares. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.

SIU obtains R67m recovery order against plumbing contractor
SIU obtains R67m recovery order against plumbing contractor

The Citizen

timea day ago

  • The Citizen

SIU obtains R67m recovery order against plumbing contractor

The Special Investigating Unit (SIU) has secured a recovery order of R67m against a plumbing contractor associated with the Department of Public Works, preventing a potential loss of R33m. Contracts declared invalid and unlawful This action follows the Special Tribunal's review, which led to the cancellation of contracts totalling R67m that were awarded to Kroucamp Plumbers between 2015 and 2019. These contracts were for services related to vacuum pumping of septic tanks and emergency interventions for sewage blockages. 'The tribunal has declared these contracts invalid and unlawful and has ordered the service provider to refund the funds received from the department in relation to these contracts,' a statement from the SIU read. Counterclaim dismissed According to the SIU, the comprehensive financial recovery includes R46.6m from invalid 2015 to 2017 contracts, and R20m from unlawful 2017 to 2019 tenders. The tribunal also dismissed a counterclaim of R33m, which Kroucamp Plumbers had submitted against the department. 'This counterclaim was effectively contested by the SIU, resulting in a favourable outcome for the department.' SIU investigation reveals misconduct The order follows an investigation conducted by the SIU, which uncovered a complex network of corruption involving falsified bidding documents, undisclosed conflicts of interest, and payments made to officials who manipulated the tendering process. 'The investigation revealed that Kroucamp Plumbers misrepresented its Broad-Based Black Economic Empowerment (B-BBEE) status, submitted incomplete bidding information, and colluded with departmental officials to secure contracts totalling millions of rands.' Kroucamp might be held personally responsible In addition, the tribunal determined that the company's director, Johannes Jacobus Kroucamp, exploited the corporate structure for personal gain, thereby jeopardising the interests of the state. 'Judge David Makhoba emphasised the gravity of the misconduct, indicating that the tenders breached constitutional procurement regulations and eroded public trust. 'The ruling annuls both contracts and revokes the juristic personality of Kroucamp Plumbers, requiring the company to compensate the state for the financial losses incurred. Consequently, Kroucamp may be held personally accountable for the company's debts owed to the state,' the statement said. The SIU conducted its investigation into the Kroucamp Plumbers corruption case under Proclamation R20 of 2018. 'This proclamation authorised the SIU to investigate allegations of serious maladministration, improper conduct, and corruption in the awarding of tenders by the Department of Public Works and Infrastructure.' The SIU explained that it is also empowered to institute civil action in the High Court or a Special Tribunal to address any wrongdoing uncovered during investigations related to corruption, fraud or maladministration. In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU refers any evidence of criminal conduct it uncovers to the National Prosecuting Authority for further action. – Breaking news at your fingertips… Follow Caxton Network News on Facebook and join our WhatsApp channel. Nuus wat saakmaak. Volg Caxton Netwerk-nuus op Facebook en sluit aan by ons WhatsApp-kanaal. Read original story on At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!

Starlink plans R2bn investment to bypass BEE regulations and switch on the service in SA
Starlink plans R2bn investment to bypass BEE regulations and switch on the service in SA

Eyewitness News

timea day ago

  • Eyewitness News

Starlink plans R2bn investment to bypass BEE regulations and switch on the service in SA

South Africa's regulations require an ICT company, network infrastructure operators and communications service providers to be 30% black-owned. In May, South Africa's Minister of Communications and Digital Technologies Solly Malatsi published a review of the B-BBEE licensing rules for satellite service providers, potentially opening the door for Starlink's entry into South Africa. Speaking to Stephen Grootes on The Money Show, Jan Vermeulen, editor at Mybroadband says Starlink appears willing to invest in South Africa, with certain conditions.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store