SA+millionaire+boom,+Simpiwe+Piliso,+Sunday+Times

Sunday Times, Johannesburg, 09 July 2006
=SA’s millionaire boom=

//**In just one year, BEE deals help propel a ‘phenomenal’ 5880 people into the 43000-strong ranks of the seriously rich**//


 * SIMPIWE PILISO**

BLACK economic empowerment deals created most of South Africa’s 5880 new dollar millionaires last year.

“South Africa’s 15.9% growth of dollar millionaires in 2005 was phenomenal ... well above the global rate of 6.5%,” said Patrick McLaughlin, the US-based spokesman for Capgemini which compiled the World Wealth Report with Merrill Lynch.

The new millionaires have joined the ranks of the country’s super-rich, such as business billionaires Jonathan Oppenheimer, Johann Rupert, Patrice Motsepe and Tokyo Sexwale.

The new entry list has boosted the number of dollar millionaires in the country to 42883, according to the 2006 World Wealth Report, which monitored super-rich individuals in 68 countries.

Last year, the Sunday Times reported that the number of local millionaires increased to 37000 from 25000 in 2002.

Responding to the report, Motsepe — an empowerment pioneer worth R2.8-billion — said the wealth of many new faces in empowerment transactions depended on how the rand performed against the dollar.

“One moment you are worth $1-million and the next you’re worth less, depending on the conditions in the market,” Motsepe said.

“The value of the shares you acquire today may be worth $1-million ... and those same shares may be worth $500000 next year.”

But economists said more South Africans could feature among the mega-rich as the government aims to boost black participation in SA’s economy.

Financial giant Ernst & Young’s annual mergers and acquisitions review of 2005 shows that 238 empowerment deals, worth R56.2-billion, were signed last year. The new rich list, which includes property developers, financial brokers, property investors and IT experts, also comprises former civil servants and politicians with strong ANC connections such as:


 * Former Communications Department Director-General Andile Ncgaba, head of the ANC presidency Smuts Ngonyama, SABC boss Dali Mpofu and former civil servant Barend Hendricks. They are beneficiaries of Elephant Consortium, which acquired 6.7% of Telkom for R3.5-billion;
 * Lereko Mobility, led by former Environment and Tourism Minister Valli Moosa and former North West Premier Popo Molefe, secured 7% of the transport and logistics group Imperial Holdings for R1.4-billion;
 * Former chief prosecutor **Bulelani Ngcuka** and former Justice Minister **Penuell Maduna** acquired a 14.2% stake in Growthpoint Properties for R1-billion; and
 * Former Northern Cape Premier Manne Dipico, former ANC deputy secretary-general Cheryl Carolus and former Spoornet chief executive Dolly Mokgatle acquired 26% of the world’s biggest diamond producer, De Beers, in a deal worth R3.8-billion.

But economists said this week that these individuals were only a fraction of the burgeoning club of dollar millionaires, which has almost doubled from 25000 since 2002.

According to the 2006 World Wealth Report, more than half of Africa’s 83000 dollar millionaires, who have a combined fortune of $800-billion, are based in South Africa.

South Africa is also ranked fourth among the countries with the fastest-growing dollar-millionaire populations, behind South Korea, India and Russia.

The research organisation BusinessMap Foundation estimated that some R150-billion worth of BEE transactions had been concluded since 1994, and the small number of beneficiaries who started early should have benefited handsomely.

Mining tycoon Mzi Khumalo is one of those who benefited early and is said to have made R1-billion in a single deal as early as 2002. Motsepe, a former mining contractor, has made almost as much in about 10 years as Pick ’n Pay Group chairman Raymond Ackerman has made in around 40 years.

“The essential of any business is the ability to take calculated risks,” he said, describing empowerment deals.

Johannesburg economist Mike Schussler said the strength of the rand had helped many South Africans become dollar millionaires.

He said that in 2002 you would have needed R9.5-million to become a dollar millionaire, but last year you would only have needed about R6.4-million.

“Moreover, the strong stock market and house-price increases would have helped many increase their financial worth and investment portfolios,” he said.

Sales of luxury cars and luxury homes are another indicator of the growth of SA’s elite.

Toby Venter, whose LSM Distributors has the exclusive rights to import Porsches, projected that he would increase his shipments this year from about 250 to 400 cars due to demand.

The Aston Martin dealership in Sandton, which started trading in January, has already sold 40 cars that range in price from R1.5-million to a whopping R3.5-million.

About 12 of its clients were black business executives.

Black entrepreneurs have also been shopping around for private aircraft, according to Warne Aviation, which receives about five inquiries a month from potential black buyers.

The Ernst & Young report also found that directors of companies and parastatals were resigning and joining BEE ventures.

Only a year after being appointed chief executive of Anglo American South Africa, Lazarus Zim resigned in February to launch his own firm to pursue mining opportunities.

Business executives are not the only South Africans cashing million-dollar cheques. Former Bafana Bafana soccer star Lucas Radebe earned around £1-million a year as captain of Leeds United in Britain.

Proteas fast bowler Makhaya Ntini, who started his career more than 10 years ago, is expected to earn up to R1.5-million this year alone.


 * From: http://www.sundaytimes.co.za/articles/article.aspx?ID=ST6A194577**

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