PRESS READER - BUSINESS DAY / 29 JULY 2020 - 00.45 / MIDIWA GAVAZA
Company will focus on skills development and buying more products from compliant entities
Telkom subsidiary BCX will focus on regaining its high empowerment rating after a high court ruling stripped it of a special status that freed the company from having to meet standard requirements in competing for contracts.
BCX, which provides information and technology hardware and software products and services, contributed half of Telkom’s R43bn revenue for the year to March.
It suffered a blow earlier in July when the high court in Pretoria ruled in favour of Altron and MTN that a 2019 decision by the department of trade & industry to grant BEE facilitator status to Telkom and BCX was unlawful. Due to the ruling, BCX’s BEE status has dropped to level 2.
BEE legislation makes provision for state-owned entities regarded as 100% black-owned to be declared BEE facilitators. Telkom and BCX were able to bid for public and private contracts without needing to meet BEE requirements, giving them a competitive advantage over rivals. The requirements include black ownership and enterprise development.
BCX CEO Jonas Bogoshi told Business Day the companies are working on achieving a level 1 rating again. BCX says it will focus on measures such as skills development, buying more of its products and services from entities complying with BEE rules, and having more black women at executive and board level.
Bogoshi said BCX will have to wait until the end of the financial
Telkom’s revenue for the year to March, half of which was contributed by BCX year for a rerating.
Asked if the company would challenge the ruling, Bogoshi said: “We have not made a decision yet. Chances are we may not do that.”
He said the court was “not saying what [the] government did was illegal, they just said they didn’t follow the [prescribed] process. So the government has to go back and follow the process.”
The ruling is the second legal setback BCX has experienced so far in 2020.
In May, the high court ruled in favour of Dis-Chem-backed technology company Vexall after BCX sought to stop Vexall from selling additional services for its pharmacy software.
In October 2019, BCX lodged a case with the high court against Vexall and other parties, alleging that Vexall acted unlawfully in poaching BCX employees and its customers and by appropriating its intellectual property. This referred to a computer programme, Unisolv, which is considered to be the industry-standard software for use by private retail pharmacies.
About 70% of all scripts processed in SA are dispensed using Unisolv, which BCX developed in 1993.
THE COURT IS NOT SAYING WHAT [THE] GOVERNMENT DID WAS ILLEGAL, THEY JUST SAID THEY DIDN’T FOLLOW THE PROCESS
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER