Broad-Based Black Economic Empowerment: Registration of Major B-BBEE Transactions
In terms of section 13F(1)(f) of the of the Broad-Based Black Economic Empowerment Act, 2003, as amended by the Broad-Based Black Economic Empowerment Amendment Act, 2013 (“the B-BBEE Act”), one of the functions of the Broad-Based Black Economic Empowerment Commission (“the Commission”) is to maintain a registry of major broad-based black economic empowerment (“B-BBEE”) transactions above a threshold determined by the Minister of Trade and Industry.
On 9 June 2017, the Minister of Trade and Industry published Government Gazette 40898, Threshold for Major B-BBEE Transactions, and set the threshold at R25 million.
A “Major B-BBEE Transaction” is defined as any ownership transaction in terms of Statement 100 with a transaction value that equals or exceeds R25 million (excluding administration, professional and legal fees). For purposes of Statement 102, the transaction value is the value of the asset, business or equity instrument sold.
Every Major B-BBEE Transaction must be submitted to the Commission for registration. In terms of the regulations to the B-BBEE Act (“the Regulations”), such transactions must be submitted for registration as such in the prescribed Form B-BBEE 18, within 15 business days after conclusion thereof.
The requirement for registration is not a requirement to obtain the Commission’s consent for the transaction. The Commission may within 90 days after the Major B-BBEE Transaction has been registered with it, assess the transaction to determine its compliance with the B-BBEE Act, and advise the party or parties that submitted the transaction in writing of any concerns the Commission has identified regarding the transaction. The party or parties must then take steps to address the Commission’s concerns. Should they fail to do so, an investigation can be initiated by the Commission into the transaction.
The Commission must be notified of any material change to the B-BBEE elements of the relevant entity after the transaction has been registered, if such change meets the threshold for registration of a Major B-BBEE Transaction.
All Major B-BBEE Transactions concluded from 24 October 2014 up to 8 June 2017 also had to be registered retrospectively with the Commission within 60 calendar days from 9 June 2017. Although this deadline has expired the Commission still urges parties to approach it for assistance and guidance on compliance with the B-BBEE Act regarding such relevant transactions that pre-date 9 June 2017.
For a copy of the Government Gazette, please click here.
Should you require any advice and assistance with the registration of a Major B-BBEE Transaction, or the structuring and implementation of any other transaction with B-BBEE objectives, please contact us.