Standoffs over employee share schemes

MOST of the complaints the BEE Commission is receiving relate to employee share ownership schemes.

Acting commissioner Zodwa Ntuli told Sowetan the commission has received 186 complaints since its launch last year April, “85% of which relate to fronting, with most relating to mining and transport sectors”.

“Our assessment of the issues in these complaints highlight a possible abuse of the concept of employee share ownership schemes in that entities list employees as shareholders on paper with no corresponding rights and economic benefits,” Ntuli said.

Such schemes were a sham because it could emerge that employees in fact do not have stakes at all, said Ntuli.

“But the entity would continue to use the employees as shareholders for purposes of getting government tenders and contracts.

“The employee-employer relationship gives employers the advantage as most employees are afraid to ask questions for fear of losing their jobs. Therefore, schemes like these are likely to exist for a long period before being reported or uncovered.”

The corrupt practice was exacerbated by BEE shoddy verification processes, Ntuli added. This entails verification agents awarding full ownership scores despite the employee ownership scheme being flawed.

“This is illegal and it is a gap that the B-BBEE Commission is currently addressing as well. ”–