Prasa vs Swifambo Rail set out useful guidelines on B-BBEE fronting
The criminalisation of fronting practices adds to the seriousness of this issue for both existing and future B-BBEE initiatives
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...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.