S.Africa wants to fine black empowerment window-dressing

24th November 2011, Comments 0 comments

South Africa plans to start fining businesses up to 10.0 percent of their annual turnover for "fronting" black partners to score points under an affirmative action programme, an official said Thursday.

South Africa's Black Economic Empowerment (BEE) programme favours black-owned business when allocating government tenders, in an effort to even out the white minority's grip on economic power after decades of apartheid rule.

But some companies have named black directors or shareholders as a "front" for the business, in a bid to score points under the scheme without white bosses ceding real influence, said Nomonde Mesatywa, the trade ministry's BEE chief.

"We are looking at probably fining companies between two percent and 10 percent of their turnover depending on the magnitude and the severity of the offence," he said.

"We have actually for the first time introduced penalties for non-compliance, because also what we picked up in the past four years is most companies had actually sought to cut corners on implementing BEE," Mesatywa told reporters.

"Hence we find that now in terms of the picture, the landscape is distorted in terms of transformation. So what we have done is to introduce penalties for non-compliance in terms of misrepresentation and what is commonly known as fronting."

Cabinet approved the penalties as part of amendments to empowerment legislation which are to be published for public comment.

© 2011 AFP

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