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Fronting must be investigated without fear or favour - Rob Davies

Mar 06 2018 14:52
Lameez Omarjee

Cape Town – The B-BBEE Commission should be able to investigate fronting by businesses without fear or favour, said Trade and Industry Minister Rob Davies.

He was responding to a question about the investigation into fake B-BBEE certificates issued to Gupta-linked businesses, at a briefing to Parliament on Tuesday.

The complaint was made to the B-BBEE Commission by the DA on Monday. It relates to three Gupta companies namely Tegeta Resources and Exploration, Optimum Coal Mining and Trillian Consulting which were issued B-BBEE certificates and then secured contracts at state power utility Eskom.

The DA alleges that the certificates that were issued to the companies did not appear to meet the B-BBEE requirements as they misrepresented themselves as micro-enterprises. Commissioner Zodwa Ntuli agreed to investigate the matter.

“The investigation will also be expanded to focus on Eskom’s internal procurement procedures, especially as it relates to enforcing B-BBBEE compliance with external suppliers,” the DA said in a statement.

DA MP Dean Macpherson said that the matter constitutes criminal behavior and that the commission could refer the matter to the National Prosecution Authority, or the appropriate division of the South African Police Service if criminal behaviour is uncovered.

The matter was raised to Davies by the portfolio committee on trade and industry on Tuesday. “The commission has the mandate to investigate issues of fronting without fear or favour,” he said.

“We have no objection to the B-BBEE Commission doing its work thoroughly and robustly on the matter.”

Davies said that the commission had a large case load, and that fronting was “widespread” in South Africa and needs to be dealt with robustly.

Davies also briefed the portfolio committee on the progress of the department’s programmes. This includes the black industrialists programme, so far R6.9bn has been invested in various sectors through the programme. He said that 79 projects have been approved, and the programme is close to reaching the target of 100 by March 2018.

Davies said that it is important to consider what the next target will be. He acknowledged President Cyril Ramaphosa's commitment to develop black industrialists, announced in the State of the Nation Address.

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