Better and tighter legislation was needed to force the transform of the economy because the various transformation charters have failed to yield the desired result.
This is according to Economic Freedom Fighters deputy president and member of Parliament Floyd Shivambu while delivering the keynote address at the official launch of 27Four 10th BEE.conomics Transformation in Asset Management report at 27Four offices in Rosebank earlier in the week.
“The charterist approach to transformation of the financial services is not going to bear any fruitful consequences because we need a clear legislation that will have an enforcement approach to the transformation of the sector instead of trying to build consensus,” he said, quoting Martin Luther King’s statement that freedom ought to be taken because it would never voluntarily be handed over.
Shivambu said the lack of consequence made it easier to disregard and tighter laws should be enacted.
“What is the purpose of an agreement if those who do not comply with it ... there are no consequences for them,” Shivambu said, talking about charters and citing the Mining Charter as an example.
Among the things Shivambu said his party had vowed to change was tighter licensing conditions for banks. This would enforce transformation for those companies wanting to get or keep a licence.
He said the Tyme bank planned by billionaire businessman Patrice Motsepe would probably be black-owned but definitely not black-controlled.
He pointed out that proper laws would root out fronting.
“It looks like some clever white people get black asset managers, create a company and make the black person a 51% owner but the white person is the key individual and is the one who runs the show and is the one who derives the most benefit,” he said adding that Association of Black Securities and Investment Professionals should scrutinise all the firms without the exercise being driven by jealousy.
Moneyweb reported earlier this week on the latest Transformation in South African Asset Management survey conducted by BEE.conomics.
It found that R490.3 billion in assets was managed by majority black-owned asset managers, which was equivalent to almost 10% of the R5 trillion available for management by private sector asset managers and around 5% of the total value of the R8.7 trillion savings and investment industry.
“It is possible that black people manage far less than the 10% the report says,” he added.
Shivambu pointed out that the reason that black people were not given more money to manage couldn’t be skills as the biggest single asset manager in the country was the Public Investment Corporation and it was run by black people.
“It is performs better than Coronation and Investec and its black-controlled, why isn’t there a black asset manager the size of Coronation and that applies to the entire financial services sector and not just asset management,” he said.