The Department of Trade and Industry (DTI) has provided R550-million in finance for five companies that have been approved for participation in the department’s Black Industrialist (BI) programme, Trade and Industry Minister Dr Rob Davies revealed last week.

Speaking at a media briefing following a meeting of the Presidential Commission on Broad-Based Black Economic Empowerment(BBBEE), which took place at the Union Buildings, the Minister said the financing, in the form of capital and DTI incentives, would maintain 300 current jobs and help facilitate the development of 600 new jobs.

The five companies are “quality industrialists” and comprise a syringe manufacturer based in the Coega industrial development zone, in the Eastern Cape; a Gauteng-based rail engineering company; a locomotive transformer manufacturing company; and two agroprocessing companies located in the Eastern Cape and the Western Cape respectively.

Davies pointed out that, to date, the BI programme had received 107 applications, many of which had already been “scrutinised”. He explained that some of the applications required “further particulars” and that only three applications had been rejected outright.

“Many of the applications are still under consideration, while others are still eligible to receive support,” said Davies.

Meanwhile, the BBBEE Presidential Commission found that fronting practices were rife in BBBEE transactions.

During the media briefing, acting BBBEE commissioner Zodwa Ntuli stated that new regulations, which would be gazetted later this year, would provide the newly formed BBBEE Commission with legal recourse against companies found guilty of fronting.

She highlighted that such companies would be fined up to 10% of their annual turnover. Moreover, shareholders would also be liable to a fine in their private capacity and could also serve a jail sentence of up to ten years.

Further, guilty companies would not be able to conduct business with government for ten years.

Members of the Presidential Commission for BBBEE, which is chaired by President Jacob Zuma, include Minister of Women in the Presidency Susan Shabangu and Public Works Minister Thulas Nxesi, among others.