In the recent High Court case involving the Passenger Rail Agency of SA (Prasa) and Swifambo Rail Agency (Pty) Ltd, Judge Ellem Jacob Francis set out certain useful guidelines on the "fronting practice" definition in the Broad-Based Black Economic Empowerment Act (B-BBEE Act) namely "a transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of this Act or the implementation of any of the provisions of this Act including, but not limited to, practices in connection with a B-BBEE initiative: • In terms of which black persons who are appointed to an enterprise are discouraged or inhibited from substantially participating in the core activities of that enterprise. • In terms of which the economic benefits received as a result of the B-BBEE status of an enterprise do not flow to black people in the ratio specified in the relevant legal documentation. • Involving the conclusion of a legal relationship with a b...

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