KZN in BEE crackdown

Durban - KwaZulu-Natal companies failing to comply with Broad-Based Black Economic Empowerment (BBBEE) could face the law, the provincial department of economic development and tourism said on Tuesday.

"We are saying you have been given 10 years. It's high time you comply. If you do not comply you will face the law," economic development and tourism MEC Mike Mabuyakhulu said at a KwaZulu-Natal BBBEE advisory council meeting.

Mabuyakhulu said that while businesses agreed to certain BBBEE targets in a declaration made in 2000, the rate of economic transformation in the province was lagging behind that of other provinces.

He said businesses had now been given notice that if they did not comply they could face legislation with punitive measures.

"We have been too lenient," he said, adding that meetings would be convened with top chief executive officers.

KwaZulu-Natal Premier Zweli Mkhize, who chairs the council, said the department had received complaints from the community on the issue of fronting.

A BBBEE compliance unit had been established to deal with complaints handling and had successfully handled issues relating to late payment and fronting.

Some cases had been referred to the police for further investigation.

"Most of the fronting-related cases are very complicated in the sense that most of its victims do not have all the necessary documentation such as shareholder's agreements and this is common among the poor," said Mkhize.

He said the government wanted to make it clear that it would not tolerate people involved in fronting.

"We believe that fronting is not only ethically reprehensible, but it makes a mockery of a system designed to bring economic redress in our province," he said.

- Sapa