B-BBEE Commission initiates fronting and non-compliance investigations

BBThe Broad-Based Black Economic Empowerment (B-BBEE) Commission has initiated investigations against specific entities for possible violation of the B-BBEE Act relating to the B-BBEE ownership structures and non-compliance with the Codes of Good Practice in respect of the verification process. All entities were notified, and if there are adverse findings against them, they will be given 30 days to respond to the adverse findings before the B-BBEE Commission makes the findings final.

According to a press release, the commission said it is allowed to initiate an investigation on its own initiative and this often happens as a result of a tip off. If found to have violated the B-BBEE Act, the entities may be referred for prosecution and exposed to a fine of up to 10% of the entity’s annual turnover and the individuals involved can be fined or imprisoned for up to 10 years. The entities can also be excluded from doing business with government for a period of up to 10 years, and the contracts they have with any state owned entity or government department can be cancelled.

The B-BBEE Commission said it may also approach a court of law to restrain any breach or for any appropriate remedial relief, which may include setting aside the transaction or initiative. The B-BBEE Commission will not discuss the merit or the details of its investigative process, but the findings will be published as required in the B-BBEE Act.

The B-BBEE Commission is also allowed in terms of the B-BBEE Act to consider alternative dispute resolution, if appropriate, and where such has been facilitated and agreed upon, the B-BBEE Commission will communicate such outcome.

Companies to be investigated include Net Value Holdings, MTN Group, Nokia Solutions and Networks, Worley Parsons, Netcare, Dusta-Side Holdings, Eskom and South African Social Security Agency (SASSA).

Leave a Reply

Your email address will not be published.