SAfrica's trade dept says Sasol BEE misses target

JOHANNESBURG, Sept 14 (Reuters) - South Africa's department of trade and industry (DTI) said on Friday that Sasol's (SOLJ.J) affirmative action plan, the country's biggest yet, fell short of empowerment targets because it envisages selling shares to some white employees.

Sasol, the world's largest maker of oil from coal, on Monday announced the biggest black empowerment deal since the end of apartheid, saying it would sell 10 percent of the company to blacks for 18 billion rand ($2.50 billion).

Under Black Economic Empowerment (BEE) codes, the government is asking companies to sell a particular portion of their stake to blacks to redress the wrongs of apartheid, during which blacks were excluded from the mainstrean economy.

The government has set targets for different sectors, and Sasol would likely not meet its targets by including whites under its scheme, the DTI said in a statement.

But Sasol defended the plan, adding it was fully aware that it could not include white employees in the calculation for credits under the DTI's Codes of Good Practice.

It said even with the inclusion of white employees in the employee share ownership (ESOP) scheme, the company would meet the targets set for firms in its sector.

The DTI had said it was concerned that Sasol's proposed ESOP falls short of the level of empowerment envisioned in the Codes of Good Practice for broad based BEE.

"The BEE Act and its accompanying Codes of Good Practice were specifically intended for the benefit of black South African citizens," the DTI said in a statement.

"This therefore means that when reviewing a BEE transaction of this nature, recognition will only be given to the extent that black South Africans benefit from the transaction."

The DTI said that because 4 percent of the allocation made for an ESOP is to be shared amongst permanent residents as well as white employees it was not clear what the effective allocation would be to black South African employees.

WHITE EMPLOYEES

Sasol, which was previously sharply criticised by the government for dragging its feet on empowerment, said under the BEE deal, the black public will buy up to 3 percent of the issued share capital of Sasol, mostly black staff will buy 4 percent and the rest will go to black groups.

Sasol said whites below managerial level will be given a chance to take up a portion of shares under the 4 percent stake set aside for staff, a decision it had agreed with unions.

"After excluding the white employees, the percentage of black shareholding, according to the points determined by the DTI Codes, still remains within our targeted range," Sasol Executive Director Nolitha Fakude said.

Sasol said of the 4 percent that would be sold to staff, 60 percent of this component would go to blacks and 40 percent to white employees.

It said almost 27,000 black and white Sasol employees would participate in its ESOP.

"We recognise that the DTI's Codes are aimed at benefiting black people who were not involved in the mainstream economy. We have designed our proposed transaction in the spirit of these Codes... Share ownership for all employees is important for us," Sasol said.