The Independent Communications Authority of South Africa (“ICASA”) has recently published draft legislation on how it intends to prescribe equity ownership of Historically Disadvantaged Groups (“HDG”), and more specifically Black people, as it appears in the ICT Sector Codes. In order to receive a new license or retain or take
1. The Revised Codes stipulate that: 1.1. Net Value must be valued as the lesser of two formulae. 1.2. Formula A is a step function with a target of transferring 25% of unencumbered Equity Value (Deemed Value) to black shareholders by the end of the eight-year The sub-minimum of 40%
1. Net Value Transfer Requirement 1.1. This requirement of Ownership was enacted to address phantom ownership where black names would appear on shareholder registers without value ever accruing to those black shareholders. This was frequently the case in funded structures where interest rates were greater than the sum of
