The commission monitoring compliance with empowerment legislation says it has received almost 700 complaints of fronting – in which ‘token’ black people are passed off as company shareholders – in the past four years.

The Broad-Based BEE (B-BBEE) Act, which aims to increase black participation in the economy and redress the legacy of apartheid, provides for the establishment of the B-BBEE Commission to monitor and promote adherence to empowerment legislation.

It is compulsory for all B-BBEE ownership transactions over R25m to be registered with it, notes a Business Day report.

Department of Trade, Industry & Competition Deputy Minister Nomalungelo Gina said misrepresentation and fronting by some companies frustrates efforts aimed at allowing blacks to have a meaningful participation in the economy.

Gina made the remarks during a webinar, organised by the commission, a department entity, to highlight the issue of fronting.

Those found guilty of fronting face a 10-year prison sentence, while an entity may be fined up to 10% of its annual turnover.

Gina said: ‘These white companies find blacks who agree to assist in this camouflaging effort … they hold no shareholder value (and) many are content with receiving retainer fees. Many are hell-bent on maintaining the white economic structures ... without any effort to accommodate blacks who were excluded for over 300 years by the system.’

Commissioner Zodwa Ntuli stressed that B-BBEE is an economic policy of the government.

‘We want to give blacks preferential treatment (to) advance in the market. B-BBEE is not a “by the way” – it is a must.’

Commission executive manager of investigations and enforcement, Moipone Kgaboesele, said between 2016/2017 and the second quarter of 2020/2021, 687 cases of fronting had been reported to the commission.

Among them, the mining sector accounted for 122, transport 92, engineering 73, manufacturing 40 and energy 29.

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