Ramaphosa Announces A 10-Year Jail Term For BBBEE Fronters


Deputy President Cyril Ramaphosa says individuals and companies found guilty of ‘fronting’ the Broad-Based Black Economic Empowerment (BBBEE) statistics would now face a jail sentence of up to 10 years

The deputy president, who was in a meeting with the National Council of Provinces on Wednesday said the BBBEE is now aware of the growing practice of defaulters  and would therefore impose its penalties as appropriate.

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“If you are found guilty of fronting, your business could face a penalty of up to 10% turnover, as well as 10 years in prison for individuals.

“A person convicted of such an offence, will also suffer by not being able to transact with the State for a period of 10 years.”

Ramaphosa described the BBBEE as one of the most important measures government needed to put in place to address past economic injustice and that the original drafters of the BEE Act didn’t foresee that companies would work against active transformation, and therefore the need arose to criminalize it.

“Fronting in the end is not a victimless crime,” he continued.

“The perpetrators of fronting practices often target the vulnerable, the poor, the uninformed and deprive those most in need of opportunities that should rightly be theirs,” he said as he registered his confidence that with time, businesses avoiding BBBEE requirements due to the penalties involved will be brought to book.

The Deputy President also informed the Provincial House of the Department of Trade and Industry’s progress in setting up a “one-stop shop” for potential investors in the country.

“Invest SA has been set up to assist those that want to invest in our country and to ensure all their difficulties and challenges are addressed quickly” he said.

Cyril also explained that Invest SA will combine the services of SARS, home affairs, environmental affairs, water and sanitation and importing/exporting permits.

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Meanwhile, the deputy cited a pilot project run through automobile manufacturers Beijing Auto Works, who used the programme and invested R11 billion. He said all stakeholders, government, business and labour were happy with the scheme.