The Broad-Based Black BEE (B-B BEE) Commission established in April has already received about 100 complaints about fronting and other abuses, some of which commissioner Zodwa Ntuli has found ‘traumatising’, notes a Business Day report. Most of the 95 complaints are from shareholders – most often employees – who were allocated significant shareholdings in order for the companies to achieve a high level of empowerment in terms of the codes of good practice.

Subsequently, they were sidelined, denied access to financial information, not informed about meetings and did not derive any benefit from their stakes. In some cases, the employees had no idea what they were required to sign, while in others, the shareholders were forced to exit the company once it had been awarded the desired licences or contracts on the basis of its enhanced BEE status.

Ntuli said that the second-highest number of complaints related to the work of verification agencies that assigned incorrectly a higher B-B BEE status to companies suspected of having engaged in fronting. She said the agencies were legally obliged to investigate the integrity of the information provided and proactively report to the commission on any irregularities they discovered.

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