The year 2004 was a very defining year for BEE.

It started off with the low-key signing of the BEE Act by the President on 9 January 2004. This was significant because it offered the legal framework for Broad-based BEE to take place. Following the promulgation of this Act were some interesting deals that were unveiled and some that were finalized during 2004. In the first two months of 2004 there were no major announcements of BEE deals. The flurry of activities began in March with deals such as the Kagiso Trust 27% deal with Bytes Technology Group (BTG), Izingwe 30% deal with Aberdare Cables and at the end of March 2004 the Andile Ngcabas Consortium 25% deal with Dimension Data was announced. The second quarter of 2004 opened with deals such as the 10% ABSA deal with a consortium led by Tokyo Sexwale and this generated healthy debate about the application of the Financial Services Charter principles. This deal was the first of the big four banks but a second BEE deal concluded by all the banks, the first one was the Investec deal announced in 2003. On 1 April 2004 the Sanlam deal with the Patrice Motsepes Ubuntu-Botho consortium was approved by the shareholders, making 8% of Sanlams ordinary shares to be held by people. In the third quarter Standard Bank announced its BEE deal with Saki Macozomas Safika, Cyril Ramaphosas Shanduka and staff. Once more debates around the enrichment of a few black individuals erupted especially where there is no risk assumed by those individuals. Brait also announced their deal around the third quarter. To close off the year Firstrand unveiled its deal with the Kagiso Trust, Mineworkers Investment Trust and the Women Development Bank Trust in the last quarter of 2004. In 2004 the Financial Services Charter Council was formed and the empowerment financing proposals were released. The ICT Charter also released its final draft charter for consideration by the government. The other transformation charters which were in the formulation process in 2004 included the following sectors Accounting, AgriBEE, Construction, Health, Liquor, Property, Transport, Wine amongst others. This was a year of charter festivals whose excitement is now held in check with the release of the draft BEE Codes of Good Practice. The Codes state that there are qualification criteria that need to be applied before the charters can be formulated and also emphasizes that it is not expected for every sector to develop a charter The analysis of the above key events shows that the financial services and the ICT sectors were quite active in the formulation of BEE deals in 2004. A correlation analysis of the transformation charters and the BEE deals concluded is very high. For example during and after the finalization of the mining charter in 2002 we saw a flurry of deals in the Resources sector. A similar trend is being seen in the financial services and ICT sectors. Those sectors that do not have charters were prompted to conclude deals from the pressure exerted by those sectors with charters and that have considerable commercial dealings with the government. The BEE Codes of Good Practice ended the year with a

high note when they were announced on 8 December, exactly eleven months after the signing of the Broad-based BEE Act by the President on 9 January 2004. The overall BEE theme on everyones mind in 2004 was the debate of enrichment of the few vs. empowerment of the many. Criticisms were leveled at the black individuals who were the recipients of the major deals in 2004, affectionately known as the Gentlemen of BEE. On one extreme of the debate is that these gentlemen of BEE should not allow themselves to be party to BEE deals because they have been enriched already and consequently do not qualify as being disadvantaged. On the other extreme of the debate is that these gentlemen of BEE are businessmen who conclude deals based on the opportunity presented to them. Therefore to deny them the right to take these opportunities given by a willing seller to a willing buyer would be unfair. Furthermore the proponents of this view say that the focus should fall on the companies presenting the opportunities to black people. They emphasise that these companies need to be taken to task about their efforts in finding new black partners to enter into deals with rather than only dealing with the same gentlemen of BEE. The draft codes award companies with bonus points for involving new entrants in BEE deals.