INTERVIEW WITH… Temba Mvusi, Chief Executive of Market Development at Sanlam.
When the Ubuntu-Botho broad-based economic empowerment (BEE) deal – a partnership between Sanlam and business leader Patrice Motsepe – matured on 31 December 2013, it had created R15 billion in value from an initial investment of R1.3 billion. It is arguably the most successful BEE deal in South African history.
What makes the relationship between Johan van Zyl and Patrice Motsepi so effective?
The way BEE partnerships are currently structured in our country often results in previously disadvantaged groups ultimately not deriving much benefit. BEE should not just be about the redistribution of wealth or earning points on the BEE scorecard.
From the start, the deal had an advantage over others of its kind in that Patrice personally invested R200 million to kick-start the transaction, which meant that the deal was not as highly-geared as many others are. He put his own money at risk, so he had a personal interest in the success of the transaction. He worked hard to put the right structures in place to ensure that the deal created value as widely as possible for Sanlam as well as the Ubuntu-Botho shareholders.
Remember, Sanlam was created as an empowerment financial services vehicle only for Afrikaners way back – so he saw that this could be replicated to help bring many into the centre as well.
Can Temba Mvusi give an example of how Ubuntu-Botho had an impact on the Eastern Cape. Are any of the beneficiaries based in the EC?
Patrice Motsepe under the Ubuntu-Botho banner created nine companies – one in each South African province, so there is Ubuntu-Botho in the Eastern Cape. There is an Eastern Cape company that got a share of that R15 billion. On top of that, in the 25% for broad-based groups, we have anything between 60 and 100 people who are shareholders in the Eastern Cape who are drawn from civil society, business leaders, the youth, women, communities and so on.
On top of that, a total of R6 million was contributed by the Sanlam Ubuntu-Botho Community Development Trust towards educational projects at various schools across the country – R2 million each year for three years between 2009 and 2011. 14 Eastern Cape schools benefited.
Going forward, there is more money, over R3 billion for the Sanlam Ubuntu-Botho Community Development Trust – so there are going to be big things happening.
Plans for the future?
Van Zyl and Motsepe agree that the first 10 years have been just the start of Sanlam and Ubuntu-Botho’s story of transformation and economic upliftment in South Africa. They have entered into talks and the aim is to create new avenues for continuing the success of the partnership and ensuring many more South Africans benefit in the future.
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