The B-BBEE Commission, a watchdog within the department of trade, industry & competition (DTIC) focused on increasing black economic participation and investigating fronting practices, has, in a frank assessment, admitted that companies involved in fronting are evading justice because it has just two investigators.
The impact is that the commission is struggling to complete investigations within one year of receiving allegations of fronting, as stipulated by law.
The commission, in its annual performance plan for 2026/27 to 2028/29, said it had been hit by judicial review applications by companies it took to task over fronting due to its lack of investigative capacity.
“The commission has noted with concern an upturn of review applications brought against it because of the time bar in regulation 15(4), which requires the B-BBEE Commission to finalise investigations of complaints received within one year of receipt of the complaint, which results in entities evading justice,” it said.
“In the 2023/24 period, about five cases were overturned by the high court of South Africa. The court ruled that the commission had exceeded its authority when issuing certain findings in violation of regulation 15(4), declaring those findings unconstitutional, unlawful and invalid and, therefore, setting them aside.
‘Serious challenge’
“These judicial outcomes significantly affect the commission, as roughly 90% of ongoing investigations are affected by the high court’s decisions, risking the organisation’s reputation and incurring substantial legal expenses. With only two investigators, addressing this situation presents a serious challenge.”
The report was signed off by commissioner Tshediso Matona and DTIC minister Parks Tau on April 14. Under South African laws, fronting — a deliberate misrepresentation of a company’s broad-based BEE status to secure contracts or benefits without genuine transformation — is illegal. Companies found guilty of the practice can be penalised by up to 10% of annual turnover or face 10 years in prison for their directors.
The commission, in response to a query from Business Times on Friday, sought to downplay its dire shortage of investigators while declining to reveal its caseload numbers.
“While the commission had two dedicated investigators during the 2024/25 financial year, it has since increased to nine in 2025 as a result of interventions undertaken by the DTIC to strengthen the commission’s capacity,” a spokesperson for the commission said.
“In addition, through secondments of an additional six officials from the DTIC, the commission is able to deploy enough capacity to address immediate investigative demands. In addition, where necessary, the commission utilises specialised investigation service providers from the private sector to support the management of case backlogs and complex matters.
We’re very concerned that this is not being urgently addressed.
— Kganki Matabane, CEO of the Black Business Council
“Accordingly, the commission’s investigations function is undertaken through a multidisciplinary task-team approach that incorporates legal [and] financial analysis and forensic expertise, particularly in complex matters, and should not be understood solely through a simple investigator-to-case ratio.”
The commission also sought to water down what it said in its annual performance plan, which is before parliament, about the reasons it was losing legal reviews launched by businesses it had found guilty of fronting.
“Regarding litigation, the judicial review of decisions by regulators [similar to the B-BBEE Commission] is a natural feature of administrative justice in South Africa. Therefore, like other regulators, the commission does encounter litigation by entities and individuals subject to its investigations,” the spokesperson said. The commission experiences mostly litigation occasioned by complex cases that exceed 12 months.
“The delays are also caused by the respondents with regard to submitting the required information. This experience provides important information regarding further enhancements of legislation, which is why it has been featured in the presentation of the commission’s annual performance plan in parliament earlier this week.”
Kganki Matabane, CEO of the Black Business Council, said the organisation had raised the “real and serious capacity” problem with Tau. “We’re very concerned that this is not being urgently addressed. The capacity is in terms of numbers of employees and skills of the few employees who are there; this is hampering the important work that the commission is supposed to be doing,” he said.
“We have referred many cases to the commission with little success. If this is not addressed, the implementation and acceleration of B-BBEE and decisively dealing with fronting won’t happen. We call on minister Tau to prioritise this.”
Business Times
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