The commission, which refers cases of infringement to state prosecutors, has received 1,348 complaints of fronting since 2017, said Matona.
He said, without detailing how many cases had been sent to trial, no one has yet been convicted of fronting largely because the criminal justice system was “figuring out how to work with the B-BBEE regulation”.
Listed companies are required to disclose their black empowerment status in annual reports, but fewer and fewer are doing so. In 2022, only 141 of about 400 listed companies submitted a report.
Matona said he hoped to enhance company incentives for compliance while “naming and shaming” and possibly fining those which fail to submit the reports.
President Cyril Ramaphosa has said he wants to focus on showing companies the advantages of black empowerment, but if they refuse to comply penalties would be needed.
“On this one [black empowerment], we are unequivocal,” Ramaphosa recently told reporters, describing racial inequality as an “existential challenge”.
“It must be done, and it will be done.”
Matona would not be drawn on the specifics of the proposals but said incentives could focus on increasing recognition for companies that invest in skills and enterprise development and should not be “too obsessed about ownership in existing businesses”.
He said he hoped to have amendments to the law tabled in parliament within 12 months.
Any inclusion of punitive measures could set the ANC on a collision course with its coalition partner, the pro-business DA, which has said it would resist them.
“Businesses don’t exist for altruistic purposes, we must accept that,” said DA labour spokesperson Michael Bagraim.
‘BLACKWASHING’ AND TRAINING LOOPHOLES
A common criticism of the affirmative action system is that it made a small number of political insiders extremely wealthy through shareholding deals, specially in its early years.
Economist Duma Gqubule said his research, based on an analysis of companies’ annual reports and shareholding plans, found black ownership of the 50 biggest firms listed on the Johannesburg bourse was barely 1%, far below the official average figure of about 30%.
This was because legal loopholes allowed firms to count black shareholders even after they sold their stake, or to use shareholding structures that artificially increase black ownership, a practice Gqubule described as “blackwashing”.