Wall St. and Business Wednesdays: ANC Veterans "Fronting" For White Businesses by Max Matavire

Senior ANC veterans are fronting for white-owned companies to secure tenders under the guise of black economic empowerment, former ANC councillor and businessman Tony Duba says.

His disclosures have been echoed by other black business leaders.

Duba said all black empowerment companies in the Eastern Cape were "fake".

He was commenting on concerns raised by the metro last week that emerging contractors were being used by established companies as fronts to get municipal and government contracts.

Duba accused these senior politicians of lining their pockets at the expense of the ANC's long-standing policies on such issues.

"These yesterday’s heroes are being used in the name of black economic empowerment and are outwardly pretending everything is well, when deep inside they know they are selling out," Duba said.

"Many companies purporting to be black economic empowerment are fake. In fact, in the Eastern Cape there is no genuine black economic empowerment company.”

All organised business chambers and black business forums have echoed Duba's sentiments, adding that fronting was rampant in the province and hampering black economic empowerment.

The Black Management Forum, the Port Elizabeth Regional Chamber of Commerce and Industry and Nafcoc all said emerging, formerly disadvantaged businessmen were being used as fronts.

Duba said these politicians were being used to speak on behalf of companies which had not yet transformed.

Duba, a former chairman of the Port Elizabeth municipality’s town planning and land use committee, said unless proper and stringent monitoring and verification measures were put in place, genuine black economic empowerment would fail.

Duba concurred with the Freedom Front that there should be a timeframe to the implementation of black economic empowerment.

"We must take stock of how many black economic empowerment companies were formed since the call was made and see how many failed. We must look at the reasons for their failure," he said.

"If the ANC wants to see whether its policies on black economic empowerment are being properly implemented, let's invite Cosatu and the SACP to monitor the process of implementation," Duba said.

Metro environment and health committee chairman Melvin Manentsa recently expressed great concern at how established contractors used emerging businesses as fronts to get contracts.

BMF Eastern Cape president Nceba Moss said that in Port Elizabeth alone "many prominent black people were being used by whites as fronts".

"They are getting huge rewards – between R20 000 and R30 000 per month – for the use of their names when they are not adding any value to the companies they purport to represent," Moss said.

Fronting, he said, was killing the whole objective of black economic empowerment.

Percci black economic empowerment manager Roshen Makan said new legislation aimed at stopping the use of "frontmen" would scrutinise company profiles, their operational management structures and their procurement policies.

Nafcoc metro deputy president Mnyamezeli Dyala said black economic empowerment would not succeed until fronting was nipped in the bud.


Note: This article first appeared in The East Province Herald

Wednesday, March 3, 2004