BY MEISE NKAISENG ATTORNEYS – VANDERBIJLPARK AND THREE RIVERS, GAUTENG | May 25, 2021

Blog By

Steven Meise
Director at MNI Attorneys
Specialist in Corporate Law

The Broad-Based Black Economic Empowerment Amendment Act, 46 of 2013 (“the Amendment Act”) came into effect on 24 October 2014.

FRONTING DEFINED: The Amendment Act introduces a broad definition of “fronting practice” which essentially is a transaction, arrangement or other act that directly or indirectly undermines or frustrates the achievement of the objectives or the implementation of any of the provisions of the Broad-Based Black Economic Empowerment Act 53 of 2003 (“the BEE Act”).

OFFENCES AND PENALTIES: The Amendment Act criminalises fronting and any person convicted of an offence in terms of the BEE Act may be liable to a fine or a prison sentence of up to 10 years; or in the case of a juristic person, a fine of up to 10% of its annual turnover. Further, any person convicted of an offence in terms of the BEE Act may not for a period of 10 years from the date of conviction, contract or transact any business with any organ of state or public entity and will be registered in a register of tender defaulters with the National Treasury. The Amendment Act furthermore creates an offence for individuals who do not take proactive steps to ensure that fronting is not taking place in any ventures in which he or she may be involved.

Meise Nkaiseng Attorneys advises and assists a broad spectrum of corporate clients, including EME’s, QSE’s and large enterprises, with their B-BBEE structures and requirements. We were awarded the PMR Africa Diamond Arrow Award for ”best law firm” (Business Sector) in the Sedibeng Region for three years in a row (2018, 2019 and 2020).