BBBEE Major Transaction Reporting

Under Regulation 18 of the Broad-Based Black Economic Empowerment Regulations a party that enters into a BBBEE transaction which the share value is above R25 000 000 (Twenty-Five Million Rand), has to submit the transaction to the Broad-Based Black Economic Empowerment  Commission (“hereafter the Commission”) for registration within 15 days of concluding the transaction. The Commission must within 10 days, issue the certificate of registration. The Commission may within 90 days after registration, assess the transaction to determine adherence to the Broad-Based Black Economic Empowerment  Act, 53 of 2003, as amended by Act 46 of 2013(hereafter the “Act”).

The role of the Commission is:

• Registration of a major broad-based black economic empowerment transaction.
• Assessment of the transaction to determine adherence to the Act.
• Notify the party to the transaction in writing of any concerns about the transaction.
• If concerns not remedied, the Commission may proceed to initiate an investigation in terms of section 13F(1)(d) of the Act.

Offences and Penalties

A person commits an offence if that person knowingly –

• Misrepresent or attempts to misrepresent the BBBEE status;
• Provides false information or misrepresents information;
• Engaging in a fronting practice.

These sanctions are criminal sanctions with a potential 2% of the entity’s annual turnover. The principle of true empowerment should be at the heart of any transaction. Contact us for assistance.