Firms adopt economic empowerment drive for Blacks.

In the end, it’s all black for Indian companies operating in South Africa. Around 20 Indian companies are trying hard to adopt the Black Economic Empowerment (BEE) — an ambitious drive of the South African government to provide equality to people who have been left out of the mainstream so far.

BEE is not just about having a black CEO or ensuring that a percentage of managers in a company are blacks. Many corporate entities are offering equity holding to the black community.

For instance, the UB Group has given 25 per cent of its holding in United National Breweries (SA) to a local financial institution headed by blacks.

The Tata group has given shares to backs in its various South African ventures. Tatas' Indica hatchback cars are imported into South Africa through a joint venture company —.

Accordion Investments. Two local companies -- Associated Motor Holdings (one of the largest players in the retail/wholesale vehicle business in South Africa) and Ukhamba (a BEE group) -- hold stakes in this venture.

Hasmukh Gajjar, a South African resident, is the chief executive officer of Tatas' information technology joint venture company, Consilience Technologies. This is a joint venture between the Tatas and the South African Jay and Jayendra group.

“The flavour of the day is to have a black CEO, and many ‘white’ companies are bringing in young black CEOs,” says Iqbal Meer Sharma, chief director (international trade and economic development), department of trade and industry, South Africa.

“We just have five Indian expats. The rest of the management team are made up of local South Africans,” said SP Choudhary, deputy president (operations), United National Breweries (SA).

Likewise, Mahindra & Mahindra has recruited a portion of its management team in South Africa from the local community.

“The South African government encourages corporate entities to adopt the BEE the same way the Indian government is trying to bring in a reservation policy for scheduled castes and scheduled tribes for the private sector,” said a South African government official.

However, there is a crucial difference. While the Indian government does not intend to make reservation mandatory in the face of a lukewarm response from India Inc, foreign companies in South Africa are more than eager to follow the BEE norms. Reason: It speeds up getting state approvals for government contracts.

“If we do not comply with BEE, we'll lose our licence to operate,” said Avi Ramgoolam, regional general manager, Old Mutual (personal financial advice), a financial conglomerate of banks and insurance companies.