During April 2019 the B-BBEE Commission declared that a majority of transactions involving broad-based trusts deviates from the law and do not constitute genuine and effective black ownership.
These transactions involving trusts, BBOS and ESOPs did not meet the rules set in Statement 100 Annexes (B)-(D), and thus cannot be recognised for ownership points.
The commission has informed those companies not complying to rectify their ownership structures and undergo a re-evaluation on their B-BBEE status or face investigations for fronting.
There is a defined group of black South Africans which benefits from the use of these ownership schemes and according to 2017, Intelledex Research Report over R50 billion in value has been created for these beneficiaries due to these ownership schemes.
This entails a significant contribution towards the upliftment of a large number of black South Africans and with compliance to the codes, B-BBEE can reach great success in South Africa and goal setting.
ABOUT THE AUTHOR
Dominique van Deventer obtained his LLB qualification from the University of the Free State and is currently a SEESA BEE legal advisor. He has been working for SEESA for 4 years