In a previous newsflash, we highlighted the significant changes made to the broad-based black economic empowerment ("B-BBEE") landscape in South Africa that were introduced by the new B-BBEE Regulations (the "Regulations") issued by the Department of Trade and Industry (the "DTI") on 6 June 2016.
In terms of the Regulations, all parties to a "major B-BBEE transaction" are required to register the transaction with the B-BBEE Commission. A transaction constitutes a "major B-BBEE transaction" if it falls above a certain threshold, which was not published at the time the Regulations were issued.
On 8 November 2016, the DTI published proposed thresholds for "major B-BBEE transactions" for public comment. In terms of this publication, all major B-BBEE ownership transactions, as per code 100 of the B-BBEE Codes of Good Practice, which equal or exceed ZAR100-million, calculated by either combining the annual turnover of both entities or their asset values, must be registered by the B-BBEE Commission.
Interestingly, the DTI's publication proposes that all "major B-BBEE transactions" concluded between 24 October 2014 (being the date on which the amended Broad-Based Black Economic Empowerment Act, 2003 came into effect) and the date of final publication of the thresholds for "major B-BBEE transactions" must also be registered with the B-BBEE Commission within 30 days after such final publication.
The proposals by the DTI raise further questions, including ones relating to the validity of the proposed retrospective application of the Regulations and the extent to which the turnover and assets of the groups of the parties are to be considered in determining whether the transaction in question meets the threshold.
Members of the public and interested persons are invited to submit input and comments on the proposal to the DTI within 30 days of the date of publication. ENSafrica intends to submit written comments to the DTI in this regard. Please feel free to contact us if you would like us to submit any input and comments to the DTI on your behalf.
We will keep you updated of any further developments.
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