Gigaba: BEE 'fronting' a concern
Johannesburg - Public Enterprises Minister Malusi Gigaba on
Thursday defended a decision by black business to break away from Business
Unity SA (Busa).
He said there was concern about black economic empowerment
"fronting" because it eroded the potential for authentic black
"Look at the management core in South African business,
look at the ownership of industries and enterprises," he said in an
interview with SAfm radio station.
He was responding to a decision at a Black Business Summit
on Wednesday to form a new Black Business Council, with businessman Patrice
Motsepe as chairperson, and to immediately suspend its participation in
Business Unity SA (Busa).
"The fact of the matter is that after 17 years of
(black economic empowerment) much of what we have seen with BEE is the
emergence of black shareholders who play no part in the management and
ownership of the enterprises in which they hold shares. (There is) a lot of
"Fronting" is a term used to describe the practice
of white businesses presenting fake black business partners or directors to
fulfil the black ownership requirements that accompany tendering for government
Gigaba said it was still important in South Africa to have
black business organisations.
Although South Africa had a lot to benefit from a unified
non-racial business organisation, that should be the "culmination of a
There was still racism in the private sector, said Gigaba.
"Just look at a few things... look at the Johannesburg
Stock Exchange ... black ownership of productive capital is quite low.
"Look at the management core in South African business,
look at the ownership of industries and enterprises."
Black businesspeople also had no access to finance, and
complained that even development finance institutions were not supporting them.
"We think that the resurrection of black business is an
important step that needs to be supported."
Government needed to support black business formations and
business in general and "genuine" transformation issues needed to be
In a speech prepared for delivery on Wednesday night, Gigaba
said the conduct of some private companies was fuelling the debate on nationalisation,
"There is a growing underlying legitimacy crisis
regarding whether the private enterprise is a 'socially responsible'
institution, capable of both developing the economy in a sustainable manner and
equitably sharing the benefits of economic growth and development."
In a separate interview on SAfm, Xolani Qubeka, chairperson
of the black business summit organising task team, said there was a need for a
unified business structure in South Africa, and that structure was currently
"It must be understood black businesses were part of
the founding of Busa."
But, although they had resolved to suspend their membership
of Busa, they did not exclude going back to the business body.
Their future would ride on the outcome of discussions with
The Black Management Forum membership of Busa pulled out
earlier this year, as they felt black opinions were being overrided.
Business Day reported that on Tuesday that Busa CEO
Nomaxabiso Majokweni and president Futhi Mtoba were asked to leave the Black
Business Summit. They were apparently invited by mistake, and were asked to
leave because Busa was going to be discussed.
Qubeka also called for a 50/50 representation at the
National Economic Development and Labour Council, saying present representation
was majority white.
My dear sir, why do you not open your own companies? If you open your own companies you can employ whomsoever you want to, at whatever salaries you want to, at whatever level of ownership that you want to?????? Why does anybody else have to "give" you anything? Nobody owes anybody else anything, a living is earned in a free market economy. To use your own references: why has no big "black" entrepeneurs emerged in the last 17 years? Why is there no new massive "black" universities, school, hospitals etc, (said with the utmost respect). You refer to "black capital ownership" on the Jhb stock market? Nobody was given any "capital shares", those who own then had to buy them, and they carry the risk of trading in them? maybe it is time "black" South Africa wakes up and start to understand that it is only they themselves that will work themselves out of poverty, without "taking" everything from "white" South Africa, (once again with the utmost respect, I am not a racist and believe in equality before God and man). The world will eventually start to "pity" Africa, but given the nature of man the "pity" will turn to disgust if Africa will not join the party as equals. "Black" Africa has its destiny in its own hands, and must start to bear the responsibility for this destiny or risk being left behind the rest of the "Developed" world forever.
What about a "White business Forum" or is that racist? Just wondering
Duuuuh, morning Malusi. This has been going on since inception of BEE.
There they go - Stocking the fires of blatant Racism in South Africa. Its a never ending process and it won't stop until the last white man has either been killed, or has left this continent.
Good luck to you Patrice. I would not want that job. Sounds like the infighting and levels of reality is problematic.
His peers will eat him in the end, they are mercenary in their pursuit of wealth (read greed)
This entire thing just shouts racism.. Never have I seen a country with so many racial problems that are so in deeply ingrained into the society. Such a shame.
black ..black..black.. To differentiate based on RACE! Isn't that the definition of racism?
And guess what! Right now our government is fighting for the right to sing songs of war and murder against whites! I'm sure that that is going to get foreign white investors flocking to this country. P.S. their not racist at all hey!
Get a proper education & 10 years relevant experience and THEN demand a proper job / opportunity.
Hey, here is a novel idea! Why don't blacks start their own b usinesses, employing only blacks? Then, when the business really takes off (due to superior service/product delivery) then they can take it to the JSE.
Is it quicker to just hijack the currently successful businesses??
Not all business was built on the backs of the "previously disadvantaged"
Pieter van der Merwe
Gigaba sir, what concerns me is the decline of morality and civilization in SA. This far outweighs your BEE policies... We all should be very very concerned...
Simple - remove BEE and there is no need for fronting.
Eish! This Apartheid Thing she is not dead! just a different franchise...
Just a thought - How did Patrice get so rich so quickly?
Dear Minister. The codes of good conduct is the basis upon which we determine BEE score for a company. The previous Narrow based form of BEE opened the door for fronting but has long since been revised and BEE are now scored on 7 elements with sub elements including economic interest (this means that you actually get scored on the fact that black shareholders receive their dividends or not and voting rights - counting the physical votes that black people have) It is therefore NOT based on ownership alone so you fronting tirade dont hold any water. Please read before you just jump on the band wagon dear mr minister ......
Fronting is just the response to some very evil laws. In the end no law can ever prevent good people from going ahead and evil ones from getting the trouble they deserve.