https://www.engineeringnews.co.za

Grant Thornton slams Masina’s comments over BEE verification

27th October 2014

By: Natalie Greve

Creamer Media Contributing Editor Online

  

Font size: - +

The recent release of the amended black economic-empowerment (BEE) codes for Qualifying Small Enterprises (QSE) has brought further turmoil to an already overcomplicated BEE verification sector, Grant Thornton Verification Services MD Jenni Lawrence has argued.

However, she stated that, despite recent confusion over the self-certification BEE process, it was “business as usual” with regard to conventional BEE verification services. 

“The Department of Trade and Industry (DTI) may amend the process for issuing BEE self-certification for certain companies, but there seem to be no other significant verification changes on the cards in the short term,” she asserted.

Among the major concerns contained within the newly gazetted amended BEE codes, Lawrence added, was the self-certification of BEE status for all exempted microenterprises and QSE companies with a yearly turnover of under R10-million or under R50-million, and which were at least 51% black-owned.

These companies were simply required to provide an affidavit regarding their BEE status.

“The thinking behind this was to ease the burden on black-owned companies, which is laudable. This would, however, have had the potential for massive fraud and fronting on an even greater scale than before.”

“It now appears that the DTI is considering taking this process in-house, or using the Companies and Intellectual Property Commission for this category of certification, for example, by getting that body to confirm shareholding and turnover statements. If this proposal is carried out, it could be in place by the end of the year,” Lawrence said. 

However, she argued that the Deputy Trade and Industry Minister Mzwandile Masina caused “consternation” in mid-August during an address to the Black Industrialists’ Stakeholder Engagement session, implying that verification agencies would no longer exist. 

Instead, BEE certification would be processed in-house by the DTI itself. 

With around 57 South African National Accreditation System- (Sanas-) accredited agencies and a further 350 Independent Regulatory Board for Auditors-registered BEE auditors, this would have impacted upwards of 1 000 jobs.

Masina said, at the time, that verification agencies were “fly by night” and sought to indiscriminately issue BEE certificates to undermine transformation.

His remarks came shortly before the Ministry released the amended codes for QSEs, introducing further confusion.

“His words were of enormous concern to BEE verification professionals. Many black- and white-owned businesses already view BEE and the verification thereof, as interference in their companies. It means additional expense and can be an administrative nightmare.

“The thought of having to deal directly with the DTI which, unlike the South African Revenue Service, is not geared up to deal with millions of businesses and individuals, sent a collective shiver through the business community. BEE certification is absolutely vital for competing in the South African business environment and this scenario was doomed to fail,” she commented.

“[Masina] failed to understand the incredibly strict criteria for Sanas-accredited agencies and fanned the flames of the already unsettled BEE arena. He also did so shortly before even greater changes are due to take place when the amended codes come into effect next year,” Lawrence added.

“We were also given comfort during a recent meeting between the Association of Verification Agencies and the DTI, from which it emerged that the DTI appeared to be only considering changing the process for the self-certification of BEE status,” she outlined.

The amended BEE scorecard for QSEs had, meanwhile, been released on October 10 and had been accompanied by proposed amendments for equity equivalents and the gazetting of charters, with a commentary period of 35 days.

“The usual commentary period is 60 days and we are uncertain as to why this is being rushed through. We encourage mid-sized businesses to make themselves aware of the proposed changes and respond to the DTI with their own concerns and proposals, as a matter of urgency.”

Moreover, the DTI announced on Monday that, following assent by President Jacob Zuma and its release in the government gazette, the Broad-Based Black Economic Empowerment Amendment Act, No. 46 of 2013 was now enforced as law.

“We look forward to BEE business as usual, but at a higher standard, better communication and with the correct infrastructure in place,” Lawrence concluded.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

SABAT
SABAT

From batteries for boats and jet skis, to batteries for cars and quad bikes, SABAT Batteries has positioned itself as the lifestyle battery of...

VISIT SHOWROOM 
Goodwin Submersible Pumps Africa (Pty) Ltd
Goodwin Submersible Pumps Africa (Pty) Ltd

Goodwin Submersible Pumps Africa is sole distributors for Goodwin electrically driven, submersible, abrasion resistance slurry pumps.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.072 0.119s - 157pq - 4rq
Subscribe Now