B-BBEE Commission finds something fishy with African Tuna Traders

Johannesburg – The B-BBEE Commission has found African Tuna Traders CC, Umbhalo Trading (Pty) Ltd and Homotsego Trading (Pty) Ltd to have contravened the B-BBEE Act and has since referred the findings to the Department of Agriculture, Forestry & Fisheries for consideration.

This is after an investigation revealed that credentials of black employees were presented as black shareholders for the purposes of obtaining the fishing rights that African Tuna Traders CC currently trades with in the fishing industry, with no participation or economic interest for the said black employees.

The complainant was Phephe Elias Khekhe, who was employed as a driver of Africa Tuna Traders CC since 2001 until his employment was terminated in 2010, the commission said in a statement.

He was also appointed as a director of Umbhalo Trading (Pty) Ltd and Homotsego Trading (Pty) Ltd, entities created by his employer, effective from the 01 August 2004 and on 14 April 2010 and 24November 2014, respectively.

Based on records, Umbhalo Trading (Pty) Ltd was allocated fishing rights for a period of 8 years during the Long Term Fishing Rights Allocation Process in 2005/2006, which expired on 31 December 2013.

In the 2013 Fishing Rights Allocation Process, African Tuna Traders CC and Umbhalo Trading (Pty) Ltd were both allocated fishing rights on 30th December 2013 for a period of 7 years in the Tuna Pole Fishing Sector, which will expire on 31 December 2020. During the 2015/2016 Fishing Rights Allocation Process, Umbhalo Trading (Pty) Ltd was allocated a right in the Large Pelagic Fishing Sector on 06 February 2017 for a period of 15 years, which will expire on 31 January 2032.

According to the application, Umbhalo Trading (Pty) Ltd’s ownership was 20% held by African Tuna Traders CC and 80% by Homotsego Trading (Pty) Ltd in which Khekhe and six other black people held 14.29% each as direct shareholders.

Also stated was that the 80% held by Homotsego Trading (Pty) Ltd would be transferred to Umbhalo Empowerment Trust whose beneficiaries will be black people, but such transfer did not materialise.

In practice, all three entities were operated by members of African Tuna Traders CC, Jonathan Ronald van Breda and Christopher Fergus Hamel with 50% members interest each, without the participation of and/or economic interest to black people who were presented as shareholders.

African Tuna Traders CC has 0% black ownership while the said black owned Homotsego Trading (Pty) Ltd is dormant and does not have any financial statements.

Both Umbhalo Trading (Pty) Ltd and Homotsego Trading (Pty) Ltd were created as empowerment companies but had no employees and the administrative functions for Umbhalo Trading (Pty) Ltd were performed by African Tuna Traders CC. African Tuna Traders CC stated that the only revenue of Umbhalo Trading (Pty) Ltd was from the license fees charged to other related companies on the basis of the fishing rights it holds.

African Tuna Traders CC, Umbhalo Trading (Pty) Ltd and Homotsego Trading (Pty) Ltd engaged in conduct that is contrary to the B-BBEE Act and would amount to a fronting practice which is an offence.

The white members of African Tuna Traders CC operated the entities and controlled both the operations and finances, and the creation of Umbhalo Trading (Pty) Ltd and Homotsego Trading (Pty) Ltd presents a typical opportunistic intermediary arrangement in that Umbhalo Trading (Pty) Ltd was used to secure rights/licences to operate in the fishing industry for the benefit of African Tuna Traders CC.

There were also multiple inconsistencies in the ownership information reflected in the B-BBEE documents and financial statements of the entities, which raised concerns regarding the governance in addition to misrepresentation of the black ownership, according to the commission.

Sunday World 

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