Johannesburg - A team of women in KwaZulu-Natal is making headway in the broad-based black economic empowerment (B-BBEE) rating agency arena.
When the agency AQRate was born in a tiny rented office room in 2004 it had only a fax machine, telephone, desktop computer and one employee to prove it was in business.
Today it employs 14 people, operates in a posh office with laptops, and services big companies including Sanlam, Old Mutual and Discovery.
AQRate is an agency that measures whether firms are complying with the B-BBEE codes of good practice.
The codes include management and control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.
Applicants who meet most of the requirements of the codes of good practice are given a rating of level one, while those that perform poorly are rated at level eight.
The agency was the brainchild of its directors, Linda Ngcobo and Brigitte Brun, who spotted a gap in the market.
"We saw that B-BBEE was going to be a big commercial consideration in SA and that there was no verification agency in KwaZulu-Natal, while we knew of only one that already existed in all of South Africa," Brun says.
The company was one of the first 11 verification agencies to be approved by the SA National Accreditation System in February after the codes of good practice were released in 2007.
So far 17 rating agencies have been accredited.
Thirteen of AQRate's 14 employees are female. The male hired in March works as a receptionist - the position all new employees assume.
Brun, who also acts as chief operating officer, says it was not the company's deliberate intention to recruit mostly women.
"We did not set out to employ women, but it was by default," she says.
"The company is now feeling the effects of transformation as four of our 13 female employees will soon go on maternity leave. This proves that empowerment is something that should not be overdone," she laughs.
The agency plans to hire three more men in future.
AQRate is 51.1% owned by Linda Ngcobo, Busi Mnganga and Conrad Sidego. The rest is owned by Brun and Chris van Wyk.
Explaining how the agency operates, Brun says the verification process starts when the company that wants to qualify for a verification certificate submits an application form.
The application should contain all the company's details.
Once all data have been handed in, an analyst will conduct a pre-site-visit verification by going through the documents that have been submitted. When this has been completed the analyst will visit the applicant's premises to conduct an on-site inspection.
AQRate verification manager Nosipho Mchunu says site inspections are conducted to establish whether candidates are involved in an unscrupulous commercial practice called fronting.
"Physical verification is important as it gives us the opportunity to test the legality of what the company has written on paper," Mchunu says.
"Sometimes a company could claim, for instance, on the documents, that a certain person owns 25%.
"However, when an analyst conducts an investigation within the company it is possible to discover the alleged owner does not even understand what owning the shares means, has never sat in board meetings and has not derived any financial benefit from owning the shares."
The verification analyst will compile a file of information - including a recommendation on the rating level of the applicant - and hand the file over to the verification manager.
"Then the verification manager must check if the analyst applied the correct application of the codes and whether the information in the file is adequate to support the conclusion and recommendations."
The process ends when a B-BBEE certificate is awarded to the applicant.
After a year the applicant has to reapply for the certificate.
Mchunu says the process for micro and small companies with an annual turnover of less than R5 million is concluded in about three days as they are exempted from the codes.
However, medium-sized companies that generate an annual turnover of between R5 million and R35 million and big companies with an annual turnover of at least R35 million could take a month to process.
Brun says the agency has a tight payment control structure in terms of which applicants pay a deposit of 50%. The balance has to be settled when the certificate is issued.
She has found that many black companies do not realise they also have to be rated to qualify to take advantage of government contracts.
Brun says some applicants that are not transformed employ intimidating tactics or try to bribe their way to being awarded favourable B-BBEE verification certificates.
The agency has an office in Cape Town and is in the process of setting one up in Johannesburg.
- City Press