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1 November 2006
A total of 250 small-medium enterprises (SMEs) spanning a diverse range of businesses throughout South Africa have qualified for Standard Bank shares as part of the bank's broad-based black empowerment initiative.
Standard Bank announced in January 2006 that it had embarked on a process of identifying and selecting regional businesses that would be the beneficiary of the 20-million Standard Bank ordinary shares owned by the Tutuwa Community Trust. This trust was formed for the benefit of regional businesses and community development groupings and is one of the components of the broad based grouping of black entities that acquired an effective 10% interest in the South African banking operations of Standard Bank, announced on 15 July 2004.
Together with the Tutuwa strategic partners (Safika and Shanduka) and black management and staff, the Tutuwa participants are the third largest shareholder group in Standard Bank after the Public Investment Corporation (PIC) and Old Mutual Group.
The trustees of the Tutuwa Community Trust have completed the regional business selection process and have identified 250 SMEs who meet the qualifying criteria, which include being black controlled, employing at least 10 people and having been in business for at least two years.
"We are delighted to welcome 250 important new shareholders to Standard Bank. We see this as real grassroots empowerment that will result in long-term ownership and wealth-creation for black entrepreneurs," said Standard Bank's Chief Executive, Personal & Business Banking, Sim Tshabalala.
Almost 600 SMEs applied for Standard Bank shares, of which 270 met the qualifying criteria. These were further narrowed down to 250, using the Financial and Fiscal Commission's equitable share formula to guide the allocation of the quantity of participants in each province.
The selection criteria were demanding as the trustees wanted to ensure that the SMEs were well-run, sustainable businesses.
In Gauteng, 77 SMEs have been offered participation rights, followed by KwaZulu-Natal (54), Eastern Cape (29), Western Cape (24), North West (17), Free State (15), Limpopo (13), Mpumalanga (13) and Northern Cape (2). In addition six SMEs will be offered participation rights once their details have been finalised.
The selected SMEs cover a broad range of industries including manufacturing, construction, engineering, marketing and training. These companies employ more than 10 000 people and contribute more than R1.7 billion to the economy. They have turnovers ranging from R500 000 to R20 million.
"Standard Bank believes that the nurturing of entrepreneurial activity is critical, and success in this sphere will foster the creation of sustainable economic growth in South Africa. Furthermore, we acknowledge that job creation is a national priority for the continued stability of the democratic process in the country," says Tshabalala.
Regarding the community development component of Tutuwa Community Trust, the trustees are currently establishing a community foundation that will be a sustainable independent institution with a secure capital base, long-term cash flow and have ongoing allocations to specific activities that will benefit primarily black people, especially those living in rural areas.
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