Who is the B-BBEE Commission?

We are a regulatory body established as an entity within the administration of the Department of Trade and Industry (“the dti”) by the Broad-Based Black Economic Empowerment Act 53 of 2003, as amended by Act 46 of 2013 (“the B-BBEE Act”), to oversee the implementation of the B-BBEE Act and investigate violation.

Jurisdiction of the B-BBEE Commission

We operate within the dti with jurisdiction throughout the Republic, and be impartial and perform its functions without fear, favour or prejudice, across all provinces.

B-BBEE Clarifications

In terms of section 13F (1) (a) of the B-BBEE Act, we are mandated to oversee, supervise and promote adherence with the B-BBEE Act in the interest of the public. In so doing, we must increase knowledge on the nature and dynamics and promote guidance to the public on the interpretation of the B-BBEE Act and Codes of Good Practice, and clarifications form part of our advisory services.

Nature of clarification provided

We have a mandate to provide clarification on all aspects of the B-BBEE, which includes the generic codes of good practice and the various sector codes. These are some of the issues that have been raised with us.


 

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Ownership

The continued consequences is allowed for the same number of years the black shareholder held his/her/ provided the shares were held for a minimum period of 3 years, and the ownership transaction was legitimate, value was created in the hands of black people, and the entity improved its B-BBEE status level from date of entity to exist of the black shareholder.


Multinational corporations that have a global policy that prevents them from selling equity in any host state.


In terms of Para 3.4.1 Code Series 100, an entity benefiting from the modified flow-through cannot benefit from the exclusion principle.


Conduct due diligence by interviewing black shareholders or beneficiaries if it’s a trust, as well as assessment of relevant documents such as shareholder agreement, trust deeds etc, to ensure alignment with the B-BBEE Act.


Points can be recognized where assets are sold to a company in which the seller has no relationship  with the purchaser, which means it has to be a separately identifiable business.


The enhanced recognition status for black owned and controlled EMEs and QSEs can only be achieved through the application of the flow through principle, in line with the B-BBEE objectives outlined in section 2 of the B-BBEE Act.


A party that enters into a transaction that has a value of R 25 million or more and such transaction results in ownership recognition.


The B-BBEE Commission does not approve transaction. The B-BBEE Commission will register the transaction as well as assess it to determine compliance with the B-BBEE Act.


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