Even though fronting is a criminal offence, many still find loopholes

Accrediting fronting firms hampers BEE's good intent

I recently came across a “transformed” 51% black-owned company that flashed its level 2 broad-based BEE  (B-BBEE) credentials to all and sundry as it stood at the front of the tender line, successfully winning and retaining contracts with large corporations it did business with before its “transformation”.

I say “transformed” because on closer investigation the company’s status was found to come from a 51% shareholding held by a “creatively” registered trust for black employees of the business. The 49% white shareholders and directors were trustees of the trust, while the black employees, as beneficiaries, had neither veto rights nor any say in the running of the business or decision-making of the trust. ..

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