Amid the scandal rocking Johannesburg Stock Exchange-listed Spar, the Black Business Council (BBC) has requested a meeting with the board of the grocery food chain, to discuss damning findings of an independent investigation pointing to:
- Allegations Spar wanted to use their (black economic empowerment) BEE loans to bail out white retailers.
- The impending stepping down of implicated CEO Brett Botten and former board chair Graham O’Connor.
- Manipulation of the value of stores, reported fictitious loans and discrimination against black franchisors.
BBC CEO Kganki Matabane BBC said black business was “outraged by the developments at Spar – suspecting that there may be many other private sector companies being involved in such practices”.
Said Matabane: “Most private sector companies are not embracing economic transformation in action, but only do that in words.
“This is fronting and is a criminal activity that is punishable by law. “Fronting retards progress as the benefits never reach the real beneficiaries.
“A lot of corporates are not implementing the spirit of transformation but engage in ticking boxes, for the sake of gaining BBBEE (Broad Based Black Economic Empowerment) points.”
Policy analyst Dr Nkosikhulule Nyembezi, described the widespread reprimand of the Spar group following its admission of an occurrence of a reportable irregularity has become “the kind of human firework that sometimes briefly illuminates the political sky before once again falling into obscurity”.
Said Nyembezi: “The revelations of irregularities that subvert economic transformation in this country, are shocking and unfortunate, because the country needs business leaders with high ethical standards to attract investment and realise economic growth.
“Such stories of personal enrichment of the elite, fit snugly into the corrupt side of the dubious commercial transactions that undermine our democracy.
“The thinking they represent, has a more extended pedigree.
“This corrupt practice may look nonsense wearily scribbled onto a flip-chart at the end of a closed session of the company’s annual shareholder meeting. It chimes with no end of stuff now swirling around company directors bent on evading the code of good practice and applicable regulations and has been for some time.
“It is high time that the industry regulator and government disqualified from BEE benefits the Spar group for this irregularity and others involved in similar conduct using the strength of the law.”
There was “undoubtedly rot in Spar, especially after the revelations of a fictitious and fraudulent loan and huge questions facing the group – and the retail sector and others – about money, power and entitlement to BEE incentives”.
“Our collective message should be that private companies should pull their socks to fight corruption,” said Nyembezi.
Said Brown: “The BEE leaves the majority economically poor and insecure.
“As such, the BEE is not leading to true transformation and in general, is an inadequate policy to redistribute ownership in the economy and reduce the concentration of ownership and wealth.
“It not only doesn’t sufficiently diversify ownership of wealth, more importantly it doesn’t transfer ownership of assets in the economy to the majority of people.
“Instead, it continues the historical inequalities and enriches a handful of blacks who join the elite and wealthy of the country, through using BEE and sometimes through access to the state.
“It’s uncertain how prevalent these practices are, but what is certain is that all kind of abuse of BEE legislation, is taking place – for example, being used by traditionally so-called white firms, but also by certain so-called black people, both for self-enrichment.
“We should investigate these practices and those responsible must be held accountable – including paying fines for these crimes.”
