The Black Economic Empowerment (BEE) laws of South Africa could soon undergo a major shake-up, after Ebrahim Patel – the Minister for the Department of Trade, Industry and Competition (DTIC) – suggested that the entire framework ‘needed to be reviewed’. The senior politician delivered his marks during a plenary session of Parliament.

Black Economic Empowerment faces wide-ranging reviews

Although well-intentioned, BEE has been lamented over the years due to alleged acts of corruption and poor execution. However, a flurry of fraudulent claims – where companies deliberately misrepresent how many qualifying employees they have – is now another one of those ‘top concerns’ for the department.

“Although we have made great progress with BEE, it is clear we need to bring more credibility to these statistics. Claims made by firms in BEE reports must be verified. This may require adjustments to the reporting requirements, and I will appoint an expert panel to review the entire framework, in order to address these legitimate concerns.”

“R32 billion has been made available by the DTIC to nearly 800 black-owned entities, to grow their footprint in areas like food processing, auto-components, and textiles. The first allocations from the transformation form will be shared soon.”

BEE fraud raises concerns

Last year, an extensive investigation revealed that some of the most infamous Gupta-linked companies managed to score huge contracts with Eskom, by supplying them with fraudulent (BEE) documents.

A complaint laid by the DA in 2017 prompted the establishment of a BEE Commission, which uncovered all the ways that false information was swapped between the Guptas, their companies and the board they had managed to capture at Eskom. Their findings show that linked companies Tegetta, Optimum and Trillian were been implicated.

In light of these developments, Minister Patel is now seeking a root and branch review of the framework in its current form – and he warned that those who are found to be violating the policy ‘will be held accountable’.

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Presh JM Reporter

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