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"Fronting for whites? Don’t make me laugh. I am no man’s puppet," he said in a statement.
The Star reported that Shabangu was allegedly given a R6m helicopter and R4m in kickbacks for fronting for whites in a lease deal with the public works department.
The allegations are obtained in court papers in the High Court in Pretoria in which the department is asking the court to nullify its lease agreement with the businessman.
The trade and industry department defines fronting as deliberate circumvention of black economic empowerment laws. It includes practices like "window-dressing", where blacks are appointed to senior positions in companies owned by whites, and then prevented from running them.
Comment was not available from the public works department on Wednesday.
Shabangu said: "If the department wanted to cancel the Vermeulen [Street] lease, they should have done that in 2009. It took them four years to realise that [Japie] Van Niekerk was not BEE compliant?
"I find these allegations appalling and defamatory. No amount of desperation and or poverty would make me to front for any man."
The businessman said he had already made millions by 2009, so it did not make sense why he would front for anyone.
"Van Niekerk was my business partner for more than eight years when we jointly did the Vermeulen building. We parted ways due to our differences and the department was notified of that. Why did they not cancel the lease then?"
The Star reported the lease of the Vermeulen Street building in Pretoria was for office and parking space for the human settlements department for nine years and seven months.
In court papers, the public works department claims Shabangu led them to believe the building belonged to him.
According to the report, a Special Investigating Unit (SIU) report stated that the department made monthly payments of R729,000 to Majestic Silver, Shabangu's company.
The department alleges Shabangu then transferred the money to HKML, a 100 percent white-owned company.
Shabangu told the newspaper that neither the SIU nor the department contacted him in connection with the allegations and he was not aware of the court action.
