Jail for fronters, Zuma warns

2012-07-07 20:18

Companies found guilty of fronting could lose up to 10% of their revenue, or the people involved could face up to 10 years in jail under the nation’s proposed new economic empowerment laws.

That’s the warning from President Jacob Zuma, who used his speech at a Black Management Forum dinner in Johannesburg on Friday to discuss the Broad-Based Economic Economic Empowerment Amendment Bill.

The practice of fronting involves a company misrepresenting its black economic empowerment status to secure business.

The forum, which is led by Jimmy Manyi, has previously complained to the president about the failure of the state to pay small businesses within 30 days in line with a government prescript. This hurts small business, forcing some to close shop.

Zuma said the treasury was policing compliance, and that they were considering adding a provision to the performance contracts of senior managers and accounting officers in order to promote small businesses and boost job creation.

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