There was wide spread frustration yesterday as the Naspers’ BBBEE investment scheme shares, Welkom Yizani, collapsed to a level below its seven years old subscription/entry price of R10.00 per share.
The further the share goes below R10.00, the bigger the capital loss for investors. If the situation remains like this for longer it will effectively translates into an opaque theorem translated as such: Black people have been made to pay Naspers a fee for the JSE listed media giant to derive empowerment credentials. Some investors have already sold at a price below R10 making this theorem a reality. The idea of Black Economic Empowerment (BEE), at least in its purest form, is for South African corporations who benefited from apartheid to pay ‘reparation of sort’ to black people and not the other way round.
On their second day of trading, the Welkom Yizani shares tanked to close at R9.00 having opened the day at R12.00. This is after the share had flirted with R20.00 in the early hours of the first trading day on Monday
At R9.00 the Welkom Yizani shares are trading far below the book value of R50.00 indicated at inception in 2006. The investors are screaming “We was robbed”.
About 107 000 black people responded to the Welkom Yizani invitation and paid in R10 per share. These investors were effectively borrowed R40.00 by Naspers to earn a share valued at R50.00.
The idea was that the underlying asset, a Naspers subsidiary called Media24, would deliver value at a rate that will take care of the debt and live a respectable return for investors. The debt retirement must come via dividend flow and appreciation of the target asset. But realisation is supposed to come through the over the counter (OTC) market. The share is trading way below its net asset value. More or less the same circumstance has haunted more than 200000 investors who put their hard earned money into Sasol Inzalo BBBEE investment scheme.
A few other schemes of this nature, like MTN Zakhele, have created realisable value but with hefty donation from the sponsor of the deal. Naspers did intervene by writing off a portion of its loan in 2009 to shore up the Welkom Yizani scheme. It would seem this was not enough.
The lamentation by Welkom Yizani investors and general readers, submitted on this platform is taking a political tone which Naspers in particular cannot afford.
Here follows a taste of what readers many of which claim to be investors are saying:
JB: This is daylight robbery
R: Naspers; what a disappointment. Seven years of hoping; what a waste. Thank you for making us fools. We trusted your BEE promise.
DS: An absolute rip-off. It makes one wonder whether our money was ever intended for investment, or rather to pay off some huge debt (over seven years). BEE, what a joke! Or rather, are we taken for a ride because we are ‘BEE”!
N: This was really just a Big Big Hoax. First you had to deal with incompetent staff at the so called help desk. We had to fax documents over and over again. Now THIS! This is absolutely crazy. I will advise anybody else who is still considering to buy shares DONT!! You are wasting your time and money?
MS: What a disgrace! Why rob the poor? I took out a loan for 430 shares. My interest was doubled that amount.
Naspers and Welkom Yizani should face the music and pay the R50 per share to the investors or be arrested for fraud. I think all the investors should stop trading. This is not empowering but disempowering.
MM: I think the share price of R9 is scandalous and goes against the spirit of fairness to the black and disadvantaged people that the scheme was aimed at. This is sheer daylight robbery by the BBEEE fat cats. I am hoping somebody out there can intervene.
RL: They are stealing from the poor. What happened to the extra 2 years? Old people invested their savings but got nothing in return?
W: Stealing from the poor to give to the rich way to go welcome yizani. Seven years just to see how incompetent you are or maybe you are just damn smart in fooling trusting investors. I now own 400 worthless share certificates not even good enough to use as ….
Comments from readers were submitted with full names. Ujuh.co.za resolved to abbreviate the names. We captured their comments in this article to showcase the mood out there but it was only fair to abbreviate the names because we did not speak to them for the purpose of quoting them in this article.