B-BBEE Ownership: Why The Right Share Options Count

In the context of Broad-Based Black Economic Empowerment (B-BBEE), ownership is one of the key elements of measurement. While equity transfer is the most straightforward path to ownership points, the B-BBEE Codes of Good Practice recognise that alternative arrangements may, under certain conditions, also qualify as forms of ownership.

This is especially relevant where companies seek to structure ownership in a way that allows for gradual participation or deferred acquisition, where an immediate acquisition may not be possible. One of these alternative arrangements are Options and Warrants, however not all options are equal. The Generic Codes provide a narrow window for recognition and measurement of ownership.