Photo by: Duane Daws
The Presidential broad-based black economic empowerment (BBBEE) advisory council, which convened a meeting at the Union Buildings in Pretoria, on Tuesday, has determined that fronting practices are rife in BBBEE transactions.
Acting BBBEE commissioner Zodwa Ntuli told journalists at a media briefing following the meeting that new regulations, which would be gazetted later this year, would provide the newly formed BBBEE commission legal recourse against companies that were found guilty of fronting.
She pointed out that, should a company be found guilty of fronting, it could face a fine of up to 10% of its yearly turnover. 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, those companies would be barred from conducting business with government for ten years.
Members of the Presidential commission on BBBEE, which was chaired by President Jacob Zuma, included Minister in the Presidency for Women Susan Shabangu, Trade and Industry Minister Dr Rob Davies and Public Works Minister Thulas Nxesi, besides others.