The Broad-Based Black Economic Empowerment (BBBEE) Commission has found that empowerment certification company BEE Matrix South Africa issued certificates between 2015 and 2017 that did not comply with verification procedures.
The commission said in a statement on Friday that BEE Matrix SA has agreed to implement remedial recommendations made by the commission, including a full audit of BBBEE certificates for 2015 to 2017 and a refund of fees to all entities it improperly issued with BBBEE certificates.
Further, BEE Matrix SA, its shareholders Obed de Swardt and Selvin Munusamy, as well as the technical signatory Simone Mitchell, who is no longer with BEE Matrix SA, will not be involved in the business of BBBEE verification, directly or indirectly, for a period of five years.
The commission’s investigation started in June 2017 to determine whether the conduct of the company and the verification professional in question, Mitchell, complied with the objectives of the BBBEE Act following letters of advice from the commission’s compliance division alerting BEE Matrix SA to BBBEE certificates that were issued without following proper verification procedures, and which the company failed to address satisfactorily.
“Although this action emanated from BBBEE certificates issued to Zuri Quantity Surveyors Incorporated and Ilifa Africa Engineers, the main concern was the application of verification processes.
“The BBBEE Commission found that BEE Matrix SA did not have appropriate quality control measures for verification as required. The company has cooperated with the investigation and apologised for the conduct, and will now approach the South African National Accreditation System to withdraw its accreditation as a verification agency with immediate effect,” the commission said in a statement.
One of the risks involved in achieving real black economic empowerment lies with the verification process, which, if not conducted properly, creates a fallacy of empowerment on paper and a haven for fronting practices, it added.
“Our focus on rooting out unacceptable verification practices should help to ensure that we have credible verification agencies in the system. This will give confidence that the
BBBEE certificates entities are trading with are based on properly verified black empowerment credentials, and for government entities to trust the BBBEE certificates they are presented with by entities.
“The BBBEE certificates in question have been declared invalid and withdrawn already,” the commission concluded.