Findings against AMAX


Complainant(s)		Respondent(s)
Gadifele Mashabathaka and Another		AMAX SA (Pty) Ltd
Summary / nature of the complain
Allegations: that Amax SA misrepresented the B-BBEE status of Planet Waves 237 (Pty) Ltd, for the verification period of 2014/2015 – that the B-BBEE certificate to Planet Waves 237 (Pty) Ltd indicated no black ownership when entity was 60% black owned – that there was collusion between verification agency and measured entity.
Summary findings against AMAX (Pty) Ltd
Amax SA (Pty) Ltd and Mr Gerhard Stols in his capacity as the Technical Signatory, misrepresented the 2014/2015 B-BBEE status of Planet Waves 237 (Pty) Ltd by issuing the entity with a B-BBEE certificate reflecting 0% black ownership while the entity had 60% black ownership at the time of issuing of the certificate as a result of Mr Gerhard Stols failure to request supporting documents to prove the ownership structure of Planet Waves 237 (Pty) Ltd as per claim on the application sheet; Amax SA (Pty) Ltd and Mr Gerhard Stols were entitled to issue the 2016/2017 B-BBEE certificate to Planet Waves 237 (Pty) Ltd, in that the financial year end of Planet Waves 237 (Pty) Ltd was February 2015, as such the 2007 Codes of Good Practice was still applicable to the verification process of an EME; Mr Gerhard Stols acted unethically and improperly with total disregard of his verification duties as a verification professional when he issued a B-BBEE certificate without any evidence supporting the claims made by Planet Waves 237 (Pty) Ltd in 2014; Mr Gerhard Stols’s conduct was contrary to the South African Standard on Assurance Engagements (SASAE) 3502: Assurance Engagements on Broad Based Black Economic Empowerment (B-BBEE) Verification Certificates which requires Auditors to comply with ethical requirements and to plan and perform their engagement to obtain limited assurance about whether the Certificate is free from material misstatement, an obligation that Mr Gerhard Stols, ought to have known; Amax SA (Pty) and Mr Gerhard Stols in performing verification function, failed to use and apply professional scepticism and due diligence when assessing and validating information prior to issuing the apparent invalid B-BBEE certificate to Planet Waves 237 (Pty) Ltd in a manner that displays a total disregard of the transformation ideals and objectives of the B-BBEE Act as well as the verification methodology prescribed by the verification manual; Whereas Mr. Gerhard Stols, Mr Erik Botha and Amax SA (Pty) Ltd have now shown a willingness to cooperate and further apologised for their conduct in failing to provide the B-BBEE Commission with all the required information, the failure to provide the B-BBEE Commission with the required information amounts to an offence in terms of section 13N (3) (a) of the B-BBEE Act, in that it hindered and obstructed B-BBEE Commission when it was exercising its mandate during the investigation of this matter; That the conduct of Mr. Gerhard Stols and Amax SA (Pty) Ltd falls short of meeting the required standard for verification professionals and is contrary to South African Standard on Assurance Engagements 3502 of Assurance Engagements on Broad-Based Black Economic Empowerment Verification Certificates and the objectives the B-BBEE Act
Recommendations:
Amax SA (Pty) Ltd and Mr. Gerhard Stols in his capacity as the Technical Signatory, must make a written undertaking under oath that Amax SA (Pty) Ltd and Mr. Gerhard Stols, and any other entity operating under the umbrella of Amax SA (Pty) Ltd will fully abide by the B-BBEE Act and seek advice from the B-BBEE Commission when in doubt on any matter relating to B-BBEE, and such undertaking must be submitted to the B-BBEE Commission within ten (10) days of the findings; Amax SA (Pty) Ltd must commission an independent audit of all Exempted Micro-Enterprises B-BBEE Certificates issued in 2014/2015, 2015/2016 and 2016/2017 by Mr. Gerhard Stols and Amax SA (Pty) Ltd using the approach they adopted in the verification of Planet Waves 237 (Pty) Ltd, and submit a report of such independent audit to the B-BBEE Commission within sixty (60) days of the findings; Amax SA (Pty) Ltd and Mr. Gerhard Stols must thereafter refund all measured entities that the independent audit will identify to have been improperly verified and issued with B-BBEE certificates in the approach used in verifying Planet Waves 237 (Pty) Ltd and send proof of refund to the B-BBEE Commission within thirty (30) days of the independent audit report being submitted to and accepted by the B-BBEE Commission; and Amax SA (Pty) Ltd and Mr. Gerhard Stols must within ten (10) days of the findings issue a written public apology and written individual apologies to Ms Olivia Mashabathaka, Mr Klaas Sebothoma and measured entities which would have been identified by the independent audit for this conduct, the contents of which must be approved by the B-BBEE Commission.
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GADIFELE MASHABATHAKA AND ANOTHER // AMAX SA (PTY) LTD