Law Matters: B-BBEE Commission flexing its muscles

JOHANNESBURG – The Broad-Based Black Economic Empowerment Commission (the Commission) was established under section 13B of the Broad Based Black Economic Empowerment Act 53 of 2003, as amended (the B-BBEE Act) with effect from 24 October 2014. 

The Commission is empowered to investigate any matter concerning broad-based black economic empowerment (B-BBEE) and is required to keep a registry of major B-BBEE transactions. 

This article considers the requirement to notify the Commission of major B-BBEE transactions and the powers of the Commission thereunder. 

Notification of a Major B-BBEE Transaction

The regulations to the B-BBEE Act impose an obligation on the parties to a “major B-BBEE transaction” to submit the transaction to the Commission for registration in the prescribed form. Notwithstanding that this requirement became effective in June 2016, confusion remains. 

A major B-BBEE transaction refers to any transaction between entities that results in ownership recognition in terms of Statement 100 of the Codes of Good Practice the value of which equals or exceeds R25,000,000.00. 

The notification must be made to the B-BBEE Commission within 15 (fifteen) days of concluding the transaction. This is unusual in the arena of regulatory approvals which are ordinarily required before a transaction may be implemented. 

This begs the question: what if after implementing a major B-BBEE transaction, the Commission raises concerns with it or refuses to register it?

Commission’s Powers

The Commission is empowered under section 13J(4) of the B-BBEE Act to institute proceedings in a court to restrain any breach of the B-BBEE Act (which includes the Regulations and therefore the obligation to register major B-BBEE transactions) or to obtain appropriate remedial relief.

Further, in terms of regulation 18.3, the Commission may within 90 days after the major B-BBEE transaction has been registered with it, assess the transaction to determine adherence to the B-BBEE Act and advise the parties of any concerns about the transaction. A party issued with a notice is obliged take steps to remedy the transaction within a reasonable period, failing which the Commission may proceed to initiate an investigation in terms of section 13F(1)(d) of the B-BBEE Act.

This effectively provides the Commission with the ability to review and propose revisions to a transaction after it has been implemented. The consequences of this may be severe.  

Active Investigations 

17 entities (including Eskom, MTN Group Ltd and Netcare Ltd) are being investigated by the Commission for, amongst other things, possible violations of the B-BBEE Act.

These investigations were initiated in 2017. No further information regarding these investigations has been forthcoming, however, they demonstrate that the Commission is taking active steps to enforce the B-BBEE Act. 

In summary, the Commission has extremely wide enforcement powers. Given the Commission’s post-closing powers, it would be advisable for parties considering B-BBEE transactions to engage with reputable and experienced ratings agencies and legal and financial advisors prior to concluding the transaction.

Jenna Padoa is a Partner at Cox Yeats Attorneys practising in the Corporate & Natural Resources Law Team, where she specialises in corporate law, competition law and environmental law. Marikah Calo is a 2nd year Candidate Attorney with the firm.  They can be contacted on 031 – 536 8500 or via email : and 
MarikahCalo2Img8837CAPCroppedszd - Law Matters: B-BBEE Commission flexing its muscles
Marikah Calo.


Leave a Reply

Your email address will not be published. Required fields are marked *