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Home » If it makes cash but you have no clout, Rupert and co will muscle you out

If it makes cash but you have no clout, Rupert and co will muscle you out

by Aishah Cassiem
October 13, 2021
in Uncategorized
If it makes cash but you have no clout, Rupert and co will muscle you out

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How black-owned Cape town Grand Prix SA was sidelined, after two decades of work, in bid to host South Africa’s first Formula E Grand Prix after Rupert-owned corporation joined the race.

The B-BBEE Commission has warned over the misrepresentation of B-BBEE statuses, highlighting fronting as a criminal offence which should be reported to the police immediately, following public concern over awarded Grand Prix bidder e-Movement who recently during a live radio debate on SAFM with the side-lined Cape Town Grand Prix SA (CTGPSA), claimed that they were B-BBEE compliant.

e-Movement’s Iain Banner had last week, just days prior to the radio interview confirmed with Independent Media’s SIU in writing that his company was not yet compliant and that they are in the process of applying for a B-BBEE certification, following public CIPC records which states e-Movement was non-compliant.

Banner’s company whose status remains the same at the time of print had on SAFM during a heated debate with the CTGPSA over the unfair bidding process by the City of Cape Town said that the allegations that e-Movement was not B-BBEE compliant at the time of the bid to host the 2022 international Grand Prix event in Cape Town are “complete nonsense.”

He instead, directed the BEE questions away from e-Movement to that of his business partner Trident Union Partners, who acquired 26% of e-Movement through one of its operating subsidiaries, claiming that by partnering up the black-owned Trident makes them comply with BEE and that “one shouldn’t get caught up in BEE questions”.

“The bid was signed with Trident, the company that we contracted in January 2021, and the bid was only granted by FIA in July, thereafter. So, we most certainly, not only were but are compliant,” he said.

His response, a completely different one to that given to the SIU during investigations did not add up as he previously failed to provide evidence of his B-BBEE certificate and had last week stated that “e-Movement and the majority empowered entity are now concluding the transaction and e-Movement is updating all the required CIPC records and applying for B-BBEE certification.”

While e-Movement also claimed in writing that Trident’s Siphiwe Nodwele was a director of e-Movement, despite this not showing on CIPC records, it was also discovered that Trident itself had not applied for B-BBEE certification as per the CIPC website, despite its CEO being Siphiwe Nodwele.

However, the Department of Trade, Industry, and Competition (the DTIC) warned that fronting comes in many forms including window-dressing where black people are appointed or introduced to an enterprise on the basis of tokenism, and opportunistic intermediaries where enterprises that have concluded agreements with other enterprises with a view to leveraging the opportunistic intermediary’s favourable B-BBEE status, its website stated.

The DTIC and the Companies and Intellectual Property Commission (CIPC) on the matter directed all questions to the B-BBEE Commission who warned that misrepresentation of B-BBEE status and fronting are criminal offences that should immediately be reported to the police.

The B-BBEE Commission’s communications director Mofihli Teleki said the companies in mention, that claim to be B-BBEE compliant must be able to produce proof of that in the form of a valid B-BBEE certificate issued by a SANAS accredited verification agency or a B-BBEE sworn affidavit if it is exempted from verification.

“The burden to prove claims made rests with the company making the claim,” Teleki said.

“It is a criminal offence for a company to misrepresent its B-BBEE status, which includes falsifying the certificate or using an invalid certificate, so if any person suspects that a company is misrepresenting its B-BBEE status, they can report to the Commission or to SAPS.

“It is also the duty by law for any organ of state to ensure B-BBEE compliance of companies they award bids, licenses, or any other authorisation to, including those they enter into a public-private partnership with, are B-BBEE compliant.

“This means that an organ of state or public entity must have proof of such compliance.”

Teleki said the fact that the entities (e-Movement and Trident) have not been assessed by the B-BBEE Commission, they are unable to declare their B-BBEE statuses.

“In essence, the B-BBEE Commission cannot confirm the B-BBEE status of any entity without adequate documentation needed for assessment. But the entity claiming to be B-BBEE compliant must be able to produce such proof.

Teleki warned that any entity that misrepresents its B-BBEE credentials or status would be contravening the B-BBEE Act, which is a violation of the legislation.

“In such cases, entities found guilty of such a violation or misrepresentation can be fined 10% of their annual revenue while individuals may be imprisoned for a maximum of 10 years.

“If any person or entity suspects an act of misrepresentation or fronting, such a person or entity should formally report such conduct to the Commission or SAPS in order to investigate such an allegation.

“Also, the organ of state or public entity to whom misrepresented or false information was submitted has the right to cancel such an award in terms of section 13A of the B-BBEE Act on account of such misrepresentation,” she explained.

Teleki said compliance with B-BBEE is measured and determined against the relevant requirements of the B-BBEE Act (53 of 2003 as Amended by Act 46 of 2013).

“According to the B-BBEE Act, companies that generate a revenue of R50 million and above will need to comply with all five elements of B-BBEE which include Ownership, Management and Control, Skills Development, Enterprise, and Supplier Development as well as Socio-Economic Development.

“Compliance with B-BBEE can only be demonstrated through a valid B-BBEE sworn Affidavit for Exempted Micro Enterprises (EMEs) and black owned Qualifying Small Enterprises (QSEs) or through a B-BBEE Certificate which can be issued by an accredited verification agency. In light of the latter, an entity cannot be said to be compliant without such documentation.

“Generally, EMEs and black-owned entities claim B-BBEE automatic status levels based on the total annual revenue and black ownership percentage, through which black ownership must be aligned to the three ownership requirements inclusive of exercisable voting rights for black people, an economic interest in the hands of black people, and net value and rules in Annexure 100 (B) to (D) for trusts, broad-based ownership schemes and employee share ownership programmes.

“Less than 51% black-owned QSEs and large entities must be verified to indicate B-BBEE compliance against all B-BBEE elements and not just ownership, which includes compliance with the ownership element.”

Teleki added that the B-BBEE Commission has the mandate to investigate alleged fronting matters as guided by the BBBEE Act whether in response to a complaint lodged or tip-off or based on its own initiative, and advised the public to report such acts immediately.

Independent Media could not get hold of Trident’s Nodwele over his BBBEE status on the CIPC website, and only received the following statement from him via e-Movement:

“We are motorsports enthusiasts and we saw this investment in e-Movement as an excellent way to not only support South Africa’s reintroduction into a major FIA event but to also achieve transformation in local motorsports.

Having the Laureus Sport for Good Foundation as one of the beneficiaries of this global event has given us great hope that the impact of this Cape Town leg of the FIA Formula-E Championship will reach far beyond the streets of Cape Town.” | aishah.cassiem@inl.co.za


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