Jun 23

23 June 2005

Ditikeni acquires 25% of the ESOP Shop

Ditikeni has acquired 25% of The ESOP Shop, the leading adviser to industry on employee share ownership schemes. It is Ditikeni’s 11 th acquisition.

Gavin Hartford, founder and managing director of The ESOP Shop said that the new partnership made good business sense.

“We obviously needed a broad-based empowerment partner and I liked the shape and feel of Ditikeni . They represent 23 well-established NGOs who are doing grass-roots empowerment every day in poor communities, providing an organic synergy between employee and community empowerment.”

Hartford, a former trade unionist and senior commissioner on the Commission for Conciliation, Mediation and Arbitration (CCMA), says that employee share ownership plans (ESOPs) must go beyond merely handing over shares to employees and be part of an integrated programme to improve industrial relations, drive productivity improvements and enhance short and long term savings benefits for employees in the company.

“ESOPs have become the new wave in empowerment transactions: ‘ownership’ has become a buzz word, but can be made real through a properly-designed ESOP,” said Hartford . “This form of empowerment can pay for itself over time.”

Because most employees being offered ESOPs are black, take up of schemes secure BEE points for companies. This has turned ESOPs from Cinderellas into hugely popular ownership programmes , said Hartford .

”The second factor driving the recent upsurge in ESOPs is newly announced tax concessions – worth R3 000 per annum to every employee and tax deductible for the company provided certain criteria have been met.

Ditikeni chairperson Sahra Ryklief is delighted to see Ditikeni associated with The ESOP Shop. “Workers have been largely left out of the BEE loop. The ESOP Shop is helping to change that.

“We believe that companies seeking broad-based empowerment should look at organisations such as Ditikeni as well as employees – Ditikeni to give them a link to black communities, and ESOPs to get the buy-in from their own people.”

Ditikeni is a 100%-broad-based BEE investment company. Its shareholders are all non-profit organisations working in poor communities. The ESOP Shop is Ditikeni’s 11th acquisition. Other stakes held include Caltex (1%); Stanlib (1.6%); First Afrijoint Assemblers (FAJA) (15%); Sphere Holdings (5%) and Medikredit (2%). Ends.

The ESOP Shop advises companies on the full ESOP process, from consultation with stakeholders, establishment of the structure, tax planning, financing and administration. Through associates, The ESOP Shop also manages the vital education and communication components for employee beneficiaries and trustees alike.

Ditikeni Investment Company represents credible BEE shareholders with strong links to government and broad-based economic empowerment through the work of the NGOs at 109 locations around the country. They include The Association for Rural Advancement, Trust for Community Outreach and Education, The Black Sash Trust, Social Change Assistance Trust (SCAT), Labour Research Service and the South African Council of Churches.

Issued by HWB Communications
Contact: Caroline Swift
Tel: 021 462 0416
Cell: 084 303 6777

On behalf of:
Ditikeni Investment Company
Contact: Michael Hands, Company Secretary
Tel: 083 231 5277

The ESOP Shop Contact:
Gavin Hartford, Managing Director
Cell: 082 903 1725