printer friendly version

Foreign investor ban bid dropped

Safety and Security Minister Steve Tshwete has reversed the proposal to ban all foreign investment in the security industry after a second urgent meeting with four UK companies, averting a major diplomatic row.

The ANC in the parliamentary committee on safety and security sent shockwaves through the security industry and investor community a few months ago when it said it intended to ban all foreign investment in the private security industry and force foreign-owned companies to sell to South Africans. The ban would have included all shareholdings.

Four British companies ADT, Chubb, Securicor and Group 4-Falke have invested R3 bn in the industry in the past three years. The ban was deemed to be in conflict with an investment protection agreement signed with Britain in 1994 and the high commission in Pretoria expressed concern about the proposals, raising the possibility of a major diplomatic row.

Representatives of the four companies met Tshwete to discuss the issue. After the meeting Tshwete said the companies had maintained a progressive stance throughout, had acted with circumspection and responsibility and "there will be no bars on foreign investment". However, he explained the revised bill would not allow foreigners to be directors of local security companies without special exemption from the minister. The companies also committed themselves to black empowerment.

Group 4-Falke Vice-President Stephen Brown, speaking on behalf of the group, said they were grateful that agreement had been reached and were happy to be committed to SA. He said the investors recognised that black empowerment was a vital part of operating in SA and stressed the companies' commitment to it.

Source: Business Day

Share this article:

Further reading: