In a move to help improve the activities of black industries, the south African Government has announced its decision to support black industrialists with the sum of R550bn.
This was revealed on Tuesday evening by the SA Trade and Industry Minister Rob Davies at a briefing following a Black Economic Empowerment (BEE) Advisory Council meeting at the Union Buildings in Pretoria.
There, Davis explained how and what the fund provided for by the government would benefit black industrialists, saying the funding would be made up of capital support and incentive grants.
The BEE programme which was set up to support black industrialists received 107 applications and Davis added that many of those have been scrutinized while some have been sent back for further particulars but five approvals have already been made
The state government takes this move to help improve black entrepreneurs as it works towards transforming the country’s economy
Meanwhile, the acting commissioner for the broad-based black economic empowerment (B-BBEE) Zodwa Ntuli, said fronting continued to be a thorn on the side of the government, which was the reason her office was established last year.
Zodwa Ntuli also had her report submitted at the meeting, which was chaired by President Jacob Zuma.
“We already have received about 33 complaints and 22 of those are purely on fronting,” she said, adding that the commission’s preliminary investigations proved that there was merit in the complaints some of which came from people who had not received any benefits from the B-BBEE transactions they had been part of.
“It’s very broad, it’s not that thing of a person taking a gardener and making the gardener look like they are a director. It’s bigger than that, it’s where you are a shareholder and you are a really serious shareholder in the company, but you don’t get your dividends, your dividends are diverted somehow,” she said.
Ntuli however said that the penalties for fronting included a fine of up to 10% of the company’s turnover and 10 years imprisonment. Others include exclusion from doing business with the government for up to 10 years and the offending company’s contracts being cancelled.
Speaking further, the acting commissioner Ntuli said the consultation on the 2013 B-BBEE Amendment Act was complete and the commission now had power to begin investigations which means that the amendment act will take precedence over any other law that was in force before the date of the commencement of the act.
BEE lobbyists and business people have however, called for the Preferential Procurement Policy Framework Act to be scrapped, saying it would be easier to solve the BEE problems of companies with the clause.