Hewlett Packard and BEE
Posted by Daniel Makhura on 23 October 2017 12:10 PM SAST
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Hewlett-Packard (HP) has become the first multinational to be exempted from selling 30% of its business in South Africa to black investors, the United States computer giant and government said on Monday.
Under an agreement reached with the government, the company will instead invest millions of rands in a new business institute to provide training for 1 800 students over the next six years.
HP said the deal demonstrates the company’s commitment to racial transformation of the business sector in South Africa.
“HP has always embraced the principles of BEE [black economic empowerment] and is committed to the transformation in South Africa,” Thoko Mokgosi-Mwantembe, chief executive for HP South Africa, said in a statement.
Through the institute, “the company will continue to contribute to our country’s economic growth by creating new jobs skills and opportunities ... as well as addressing the skills shortage in critical areas”.
A report in Business Day newspaper said that leading players in the IT sector such as HP, Microsoft and IBM had all raised objections with the government about the prospect of having to sell large parts of their local operations to BEE partners.
The deal, which follows lengthy negotiations, is seen as a compromise that would allay the IT giants’ fears and remain in line with government goals of transforming the racial profile of the business sector in the post-apartheid era.
“As the first equity-equivalent proposal to have been approved by government, we are pleased that another significant milestone has been achieved in the country’s transformation process” said Trade and Industry Minister Mandisi Mpahiwa.