Cape Town - Thousands of South Africans will be given the opportunity to become successful business people as a result of an empowerment scheme and a donation topping R1 billion from financial services provider Allan Gray, with backing by Standard Bank.
Allan Gray, the founder of the business who now lives in Bermuda, returned to Cape Town yesterday to announce that a broad-based black ownership scheme, E² (the E stands for entrepreneurship) had bought 18.9 percent of Allan Gray for R1.1 billion and would use the dividends to fund selected black entrepreneurs with the potential to start world-class businesses.
The funding will be advanced by Standard Bank. The R1.1 billion paid to Allan Gray for the E² stake will be used to guarantee it in case the dividends are insufficient to meet repayments.
Gray said there was now effective black ownership of 20 percent of Allan Gray. The issue of further shares to black staff would increase this to 27 percent.
Meanwhile, the company has donated 7 percent of taxed profit every year in perpetuity towards the Allan Gray-Orbis Foundation, which provides university education, board, lodging and subsistence for school leavers who have been carefully selected as fellows of the foundation.
The most successful of these will go on to postgraduate education and work training.
Gray said there were already 80 Allan Gray Foundation students attending six universities throughout the country. They were benefiting from mentorship to enable them to gain the most advantage.
He considered that the best possible investment in the future of South Africa was to provide these opportunities without strings attached. It was hoped that the students would go on to become entrepreneurs founding world-class companies, but there would be no pressure on them to do so. If they chose to work for existing companies where they could make a valuable contribution, they would be free to do so.
In line with the department of trade and industry's codes, beneficiaries of the scheme would be representative of the country's demographics, which meant that 78 percent of them would be black Africans and up to 10 percent could be white.
Thando Mhlambiso, the chairman of the trustees of E² and a director of Allan Gray, expected that the fellowship would "in due course provide scholarships and bursaries to about 500 university students at any one time".
Jakes Gerwel, the chairman of the Allan Gray-Orbis Foundation, said that in recognition of the need for more South Africans to do well at science and mathematics, it intended to extend its support to the brightest pupils at primary schools to enable them to attend old model C schools and private schools, where they would get the best education.