Fronting Still a Problem says BEE RegulatorWritten by Linda Ensor
The Broad-Based Black Economic Empowerment (B-BBEE) commission plans to issue about 50 preliminary and final findings against companies for contraventions of the B-BBEE act, according to commissioner Zodwa Ntuli.
Companies will have opportunities to comment on findings before they are made final. The commission began investigating alleged noncompliance by 17 companies, including Nokia, MTN and Netcare, and verification agencies in August. More investigations are under way.
A major form of noncompliance is fronting, or the introduction of spurious schemes that purport to introduce black shareholders (sometimes a domestic worker) without assigning any benefits to them.
This enhances a company’s B-BBEE status and increases its chance of winning contracts. "Fronting is prevalent and some companies have already been issued with findings and more are following," Ntuli said.
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