Tagged: Fronting

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Are BEE Share Schemes Creating Shareholder Value? Listen to our Chairman, Keith Levenstein, discussing the types of BEE share schemes, their benefits and pitfalls.

Need a BEE Verification? We can assist you! View our managed services here. Click here to gather an enormous amount of free information from our website Interview on SAFM with EconoServ chairman Keith Levenstein   NASTASSIA ARENDSE:  We are looking at BEE share schemes. What prompted this idea was the Sasol Inzalo unbundling...

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BEE Commission to Face its Biggest Challenge and Set Precedent

The BEE Commission is about to set a precedent which will decide the validity of what, to date, have been questionable BEE transactions.  The BEE Act states that the BEE Commission must maintain a registry of major transactions. Regulations issued in 2017 defined a major transaction as a deal worth...

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B-BBEE Commission is getting serious about fronting

Following on from our previous newsletter where we criticized the B-BBEE Commission for not taking sufficient action against the scourge of fronting, the Commission has now issued a media statement naming 17 companies that are currently being investigated for possible fronting practices and non-compliance with the B-BBEE Act. The media...

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B-BBEE Companies Must Comply or Face Action: Trade and Industry Minister

The Minister of Trade and Industry (the dti) Rob Davies has said that the Broad-Based Economic Empowerment (B-BBEE) Commission should take action against companies that are found not complying with the B-BBEE requirements for transformation. To date, the Commission has only received 27 reports from the Johannesburg Stock Exchange (JSE)...

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BEE Commission Takes Aim at Ownership Schemes – EconoBEE Newsletter – 22 September 2016

  Ownership trusts have been an extremely common substitute for Ownership transactions. Trusts and similar schemes always had a dark cloud sitting over them because many believed they didn’t correctly follow the BEE legislation. Breaking news: This week The BEE Commissioner made her first moves at defining the status of...

BEE Commission Takes Aim at Ownership Schemes

The BEE Commissioner is doing an excellent job combating fronting. In a short space of time the Commissioner, Zodwa Ntuli has issued Practice Guides, and issued notices to various organisations she felt who were not following the spirit and intention of the codes. The latest media release concerns a consultancy...

EconoBEE - BEE Points = Business

Acting BEE commissioner speaks at EconoBEE event – EconoBEE Newsletter – 15 June 2016

  Acting BEE commissioner speaks at EconoBEE event On the 13th May 2016 EconoBEE was proud to host the acting BEE Commissioner Zodwa Ntuli at our monthly client breakfast. We had a fantastic event with over 80 professional business people from a wide variety of business interests. We host informative...

Scheming schemes

We pride ourselves on helping our clients get the best BEE score, in the best possible way, making perfect business sense in the most economical way.We know the BEE codes and the right strategies to adopt. We also understand the risks associated with BEE. We do not want our clients...

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SANAS (National Accreditation System) and its own BEE certificate

Need a BEE Verification? We can assist you! View our managed services here. Click here to gather an enormous amount of free information from our website We have many clients who procure from SANAS (SA National Accreditation System). In many cases, this is an exclusion to a company’s eligible procurement, but it can...

Broad-based schemes

Still making the news is the clarification issued by the dti on 5th May 2015, and its subsequent retraction on 15th May 2015.   The intention of the clarification was to clamp down on dodgy or as the minister calls them “mischievous” broad-based schemes – not to close them all....

Broad-based/employee ownership schemes

  We are pleased that the minister has decided not to implement a blanket ban on broad-based and employee ownership schemes see http://www.thedti.gov.za/editmedia.jsp?id=3314. As we have said previously the minister would have to retract his notice, because it was wrong. A good analysis of some good broad-based and employee ownership...

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Critical mistake or fantastic loophole – EconoBEE Newsletter – 14 August 2014

Critical mistake or fantastic loophole. Practical interpretations have always been a key factor in determining the success of certain BEE transactions. The Amended Codes released in October 2013 with an anticipated start date of 1st May 2015 has all but guaranteed that without the right approach your score will drop...

How to Front Successfully

Over the years we have seen more and more creative ways to front. We have reported virtually all activities to the dti, or SANAS or IRBA, as well as the sector councils. Regretfully, little or in most cases no action is taken against offenders. Most often the dti does not...

Fraud and fronting

Original publish date – Fri, 27 Jul 2012 14:08:26 +0000, Keith B-BBEE Fraud and FrontingFraud and fronting is quite prevalent in the B-BBEE sphere. The expectation initially was that it would be self-regulating. The B-BBEE act and codes do not make sufficient allowance for legal regulation. Anyone who issues an...

A not-so unique way of fronting

Original publish date – Tue, 30 Oct 2012 15:01:50 +0000, Keith Many companies are hooking into what they consider a unique way to front and misrepresent their BEE status. The BEE codes define an EME (exempt micro enterprise) as one that has an annual turnover of less than R5 million....

Yes, business is to blame

Original publish date – Tue, 11 Jan 2011 06:42:49 +0000, Keith We have supported transformation since the day it was genuinely proposed. We have rejected enrichment, and tenderpreneurs, but always felt, and known that economic transformation was needed. Our country’s history was such that the vast majority of the population...

Update – SANAS B-BBEE Scorecard

Original publish date – Tue, 04 May 2010 08:05:15 +0000, Keith Christinah of SANAS called me to discuss my request for their scorecard. She said they used to have a scorecard, self assessed, but when the minister issued his notice that self assessment would not be valid after August 2009,...

Suspect scorecards – is Serra Fronting?

Original publish date – Sun, 31 Oct 2010 14:01:52 +0000, Keith Serra® Services is a company that provides washroom products and services. According to their web site, “the company was established in 1985 and grown to create a competitive position in the washroom industry.  According to independent market surveys, Serra®...

Suspect scorecards

Original publish date – Wed, 20 Oct 2010 11:38:55 +0000, Keith We are seeing more and more queries of scorecards. Not because there is necessarily fronting but because more people are checking the scorecards. We have been at the forefront of checking scorecards: we have discovered fronting and reported it....

Fronting should be criminalised

Original publish date – Thu, 19 Aug 2010 06:23:24 +0000, Keith See http://www.busrep.co.za/index.php?fArticleId=5607784Parliament wants to criminalise fronting. My point is it is fraud, and action can be taken, especially is a company director commits fraud. I don’t think the dti has the capacity to stop it. I think a good...

Fronting and Enrichment – the solution

Original publish date – Fri, 20 Aug 2010 13:57:36 +0000, Keith Government tenders awarded to tenderpreneurs, and enrichment via dodgy ownership deals causes a lot of anguish for many South Africans.  Currently government tenders are awarded on the basis of many factors: price, performance and “empowerment credentials”. This loosely translates...