BEE consultancies being probed for violating B-BBEE Act

Ironically, six of 17 companies being probed by the B-BBEE Commission for violation of the B-BBEE Act and failure to comply with the Codes of Good Practice contained in the Act are themselves B-BBEE verification and compliance consultancy companies.

Effectively, their job is meant to be to help other companies tick the boxes on the B-BBEE scorecard by offering advisory services to corporate companies to ensure compliance.

Almost all of them will be investigated for whether their “conduct of verification follows the procedures required of a verification agency and the verification professionals in line with the B-BBEE Act”.

They will also be investigated to find out “whether the black ownership structure of the verification agency complies with the black ownership requirements”. The commission has stated that it received letters of complaint from various clients of these agencies.

One of the country’s biggest telecommunications companies, MTN, will also be investigated to establish “whether the MTN Zakhele and MTN Zakhele Futhi B-BBEE schemes meet the requirements for black ownership elements and comply with the B-BBEE Act”.

Another multinational, Nokia Solutions and Networks South Africa, will also have to face tough questions of its own.

They will have to answer on “whether the B-BBEE ownership transaction involving the employee trust and Sekunjalo Investment Limited through specific entities (resulting in 26% black ownership), and the subsequent change in black ownership (resulting in 31.28% black ownership) by Sekunjalo Investment Limited comply with the B-BBEE Act”.

Eskom, currently in the news for various tender irregularities involving companies linked to the Gupta family, will be probed in relation to “whether the entity complied with the requirements of section 10(1) of the B-BBEE Act in the issuing and awarding of the Duvha Power Station tender to a Chinese company, which is alleged not to be B-BBEE compliant”.

The South African Social Security Agency (Sassa), whose executive authority in the form of Social Development Minister Bathabile Dlamini is currently facing a court case for tender malfeasance, will also have to convince the commission it is not involved in any wrongdoing.

The investigation will seek to establish “whether Sassa complies with section 10 (1) of the B-BBEE Act in issuing and awarding tenders, and whether allegations that the tender for the payment of social grants to Cash Paymaster Services (CPS) was awarded to a company (CPS) that is engaging in a fronting practice in violation of the B-BBEE Act”.

Other areas of investigation include fronting and whether the implementation of the B-BBEE ownership scheme involving black ownership by employees using an employee trust meets ownership requirements and complies with the B-BBEE Act.

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