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Cape Town - Sham black economic empowerment (BEE) was one of the issues being tackled by the the Presidential BEE Advisory Council, Nomonde Mesatywa, chief director of the BEE unit at the department of trade and industry, told parliament on Wednesday.
Mesatywa said one of the solutions being looked at by the advisory council was a cooperative agreement with the special investigative unit looking into fronting, and the possibility of such cases leading to criminal prosecution.
According to Mesatywa, sham empowerment includes cases in which a black person, such as a gardener, is identified as a director or shareholder of a company in white hands, but that person derives no benefit from and has no say in the company.
Allegations of sham empowerment were, for example, levied last year against gold mining group Simmer and Jack Mines [JSE:SIM] by its empowerment partner, Vulisango.
This obliged the department of mineral resources to extend a routine enquiry in mining empowerment into a probe on fronting.
This year Simmers underwent complete transformation after its board of directors and executive team were removed from their positions because of the Vulisango dispute.
Mesatywa said that the establishment of a statutory body to regulate BEE verification was being investigated because there were serious examples of unethical behaviour and inadequate capacity at verification agencies.
So far 129 verification agencies had applied for accreditation and there were currently 42 accredited agencies, she said.
Studies conducted by the department during the 2007/08 financial year showed that empowered institutions reflected only an average of about 15.13% black ownership compared with the target of 25.1% in the department's empowerment code, which is contained in the Black Economic Empowerment Act.
- Sake24.com
Mesatywa said one of the solutions being looked at by the advisory council was a cooperative agreement with the special investigative unit looking into fronting, and the possibility of such cases leading to criminal prosecution.
According to Mesatywa, sham empowerment includes cases in which a black person, such as a gardener, is identified as a director or shareholder of a company in white hands, but that person derives no benefit from and has no say in the company.
Allegations of sham empowerment were, for example, levied last year against gold mining group Simmer and Jack Mines [JSE:SIM] by its empowerment partner, Vulisango.
This obliged the department of mineral resources to extend a routine enquiry in mining empowerment into a probe on fronting.
This year Simmers underwent complete transformation after its board of directors and executive team were removed from their positions because of the Vulisango dispute.
Mesatywa said that the establishment of a statutory body to regulate BEE verification was being investigated because there were serious examples of unethical behaviour and inadequate capacity at verification agencies.
So far 129 verification agencies had applied for accreditation and there were currently 42 accredited agencies, she said.
Studies conducted by the department during the 2007/08 financial year showed that empowered institutions reflected only an average of about 15.13% black ownership compared with the target of 25.1% in the department's empowerment code, which is contained in the Black Economic Empowerment Act.
- Sake24.com
