Article provided by Tony Kruger.
The gazetted Broad Based Black Economic Empowerment (BBBEE) Amendment Bill is aimed at putting in place strict measures to prevent fronting, Minister of Trade and Industry Rob Davies says. “What we are doing is defining it… more closely in the bill so that there is a specific statutory offence of fronting,” Davies said in Pretoria.
Fronting is when a company pretends to be compliant with the act by placing blacks in positions that make it appear that they own the company, or are at a level to make decisions. “Now that would be a fraud as you are trying to do that because you want to get a regulatory benefit, or present yourself as something that you are not,” Davies said.
He was speaking after a presidential BBBEE advisory meeting at which progress made on the legislation and the codes of good practice were reviewed.
He said a commissioner would be assigned to focus solely on fronting. The commissioner would investigate cases of fronting, correct the situation and, in extreme cases, have the authority to prosecute those involved.
“The problem is we haven’t got provisions in place to catch fronting… ordinary law enforcement officers don’t have the capacity to go and investigate transactions of that nature to see where fronting is taking place. “So we are introducing a BEE commissioner who will be charged with looking into the matter.”
Davies said the objective was to provide ways of measuring the degree to which an individual was involved in empowerment. The minister said the amendments to the bill would ensure black economic empowerment contributed to the creation of real entrepreneurs in SA. – Sapa