RON DERBY: Empowerment deals should stand or fall by their own merits
It is in the interest of all to take a sober look at their transactions
The story of how Mzi Khumalo profited from his empowerment deal with Harmony Gold more than a decade ago will probably go down as one of the shrewdest pieces of business done in the name of black economic empowerment. One day Harmony was in a deal with a broad-based consortium called Simane, the next day they woke to find that, in fact, Khumalo was their partner and, to top it off, he had already sold his stake, leaving the miner without a black empowerment partner. What Khumalo had done was what any smart investor would do - buy on the cheap and sell at a profit. But it's true that perhaps his dealings weren't in the spirit of empowerment and towards what, I guess, is its ultimate goal of transforming major sectors in the economy and, in the case of his Harmony deal, mining.He didn't ensure that Harmony retained its empowered status by selling his stock to other black investors, the few that there are - he sold in the open market. It was a smart investment play, but it raised quest...
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