Businesswoman hauls white business partner to BEE commission for fronting

A businesswoman has hauled her white business partner to the Broad-Based Black Economic Empowerment Commission. Picture: File

A businesswoman has hauled her white business partner to the Broad-Based Black Economic Empowerment Commission. Picture: File

Published May 19, 2023


Pretoria - A businesswoman has hauled her white business partner to the Broad-Based Black Economic Empowerment (B-BBEE) Commission, accusing him of “fronting” with her to benefit from the government policy.

Nonhlanhla Motaung, 34, is accusing Dean Gavin Graham of keeping her as a front to benefit from the BEE status despite her being the major shareholder at KGB Assessors (Pty) Ltd.

She further accuses Graham of having pressured her to sign agreement documents in the absence of her lawyers when they started the business in 2016 and claims she has no knowledge of the business’s financial records.

The two business partners founded KGB Assessors as a company after Motaung, while still owning Vintage Assessors, got Graham to help with the growing workload, according to her.

After a couple of meetings Graham convinced Motaung to go into business with him, where it was agreed that she would be the major shareholder owning 51% as opposed to Graham's 49%.

In a letter of complaint, dated May 16, 2023, to the Pretoria-based BEE Commission, a chapter nine institution under the wing of the Department of Trade and Industry that deals with BEE disputes, Motaung said Graham had been trying to push her out of the company after she inquired about the company's finances.

KBG Assessors was incorporated on August 4, 2016. “This was a result of a meeting between myself and Mr Dean Gavin Graham wherein he requested that we should not be competitors. He further said that he is a white male and I am an African female and such a combination would attract good business from corporate clients and government entities due to a B-BBEE scorecard,” she wrote in her complaint.

She added that at the time of signing he had committed that the company would be run transparently and she would be fully involved in the running of the company as a marketing and administration officer.

She said despite the company turning over millions of rand in the years it had been running, she had only received dividends of R300 000 as a major shareholder.

“There are no audited financial statements for February 2022. For all the years since incorporation and operation of the company, I have never been a signatory to any of the bank accounts or finances of the business.

“I have been treated no different from an ordinary employee for all these years even though I am a major shareholder in terms of the official incorporation documents.

“I have been deliberately and intentionally excluded from all duties and responsibilities of a director and shareholder concerning the administration of the company for all these years.”

She accused Graham of going on expensive holidays, using the company money without her knowledge.

“Mr Graham and his wife neglected/refused (sic), despite several attempts and requests, for me to be actively involved in all respects relating to the management of the company even though I am a major shareholder.

“It is my view that the conduct of Mr Graham is synonymous with fronting for BEE status. It is my view that the conduct of Mr Dean Gavin Graham has all the hallmarks of prohibited fronting practices and are synonymous with fronting for BEE status as defined in section 1(e) of Act 46 of 2013,” she said.

Contacted for comment, Graham showed interest in responding to detailed questions from the Pretoria News, but ignored text messages sent to him.

His legal representative, Senekal and Simmonds Corporate Lawyers, ignored a text sent to them and failed to answer their phone.

The commission yesterday acknowledged receipt of the complaint through a letter seen by the Pretoria News and provided case number 6/5/2023.

The letter said in part: “We acknowledge receipt of your complaint filed on 16 May. According to the regulations, the B-BBEE Commission must within one year of receipt of complaint, conduct an assessment of the merit of the complaint, request any further information from the complainant, notify the respondent of the complaint, issue summons as may be necessary, hold a formal hearing in terms of section 13J (2) of the Act as may be necessary and make a finding… ”

Pretoria News