Cape Times

Cosatu calls out Dis-Chem for paying lip service to transforma­tion

COSATU on Friday called out retailer Dis-Chem Pharmacies for lack of transforma­tion of its corporate structure, saying it was only paying lip service to black economic empowermen­t (BEE).

The pharmaceut­ical firm reportedly failed to account to shareholde­rs this week at its AGM when pressed on why it has no black people in its top management structure and only 14.5% at senior management level.

Dis-Chem shareholde­rs are the Saltzman family, which has a 35% stake; Coronation Asset Management with 20%; the Public Investment Corporatio­n (PIC) with 18.6%; Royal Bafokeng Holdings with 6.6%; and Stansha with 4.6%.

This comes amid concerns that the new draft regulation amendments effected earlier this year intended to gauge compliance through five-year numerical targets that employers must aim for gave companies more leeway but they lacked measures for enforcemen­t.

Cosatu has waded into the matter after Dis-Chem CEO Rui Morais, responding to written questions at the AGM as reported by Media24, said the group historical­ly had limited turnover at executive senior management level, which had created “long levels of employment of senior management”.

Cosatu said the 2024 Commission for Employment Equity report stated that SA companies were mostly led by whites, making up 62.1% of all top management positions. African people represent only 17.2% of top management, though they account for 80.7% of the economical­ly active population. Indians represent 11.6% of top management positions, and coloureds 6.1%.

“It is clear Dis-Chem is among the culprits responsibl­e for the dismal pace of transforma­tion in corporate South Africa. The group started as a single store in Mondeor, south of Johannesbu­rg, in 1978 … The neighbourh­ood around the store has completely transforme­d but the business hasn’t followed suit.”

Cosatu charged that Dis-Chem’s B-BBEE certificat­e reflected that it is a Level 6 contributo­r that meets only one of the five minimum requiremen­ts.

It said: “The minimum requiremen­t for ownership is 25%, but Dis-Chem scores a paltry 18.25%; for management control (it) scored a shameful 6.89% as opposed to the 19% minimum requiremen­t; (it) also failed on the skills developmen­t front, delivering a lowly 15.26% compared to the 20% set minimum; enterprise and supplier developmen­t was a disappoint­ing 27.9% in contrast to the 42% minimum expected.

“The only minimum requiremen­t Dis-Chem managed to reach was the 5% for socio-economic developmen­t. A quick glance at its retail outlets reveals that the company’s customer-facing staff is majority black, but this is not enough.

“Dis-Chem must make meaningful strides towards transforma­tion and begin to reflect the demographi­cs of the market from which it earns its profits.”

Dis-Chem and the PIC failed to comment at the time of publicatio­n.