This is not news but it's being reported. By the way you should check Citywire out - I know the editor and she's a proper financial journalist
The Financial Sector Conduct Authority (FSCA) and the Broad-Based Black Economic Empowerment (B-BBEE) Commission have signed a memorandum of understanding (MoU).
The MoU, signed today, strengthens their co-operation and collaboration in promoting the transformation of the financial sector and advancing the transformation of the South African economy, the two said in a joint statement.
The MOU is great is you want to use it as a template for a MOU
Those who have come across the BEE Commission will know that it is fundamentally incompetent. It employs incompetent people who wreak havoc because they are not qualified to do the jobs they cannot do. The Commission is in fact an accessory to a multitude of alleged crimes by issuing fines for transgressions. If a company is suspected of a crime then they must be reported or a charge must be laid. The commission has no authority to issue fines, but if it does and there is a strong chance that a company is fronting then they are accessories. They have lost two cases that I am aware of and are on the way to losing another if the judge can get over his concerns about the hue of the legal teams.
There are many examples of the BEE Commission's breach of confidentiality. Sizwe Sama Yende a journalist for City Press has reported on certain activities of the BEE Commission, which is fair and reasonable. However he has been known to report when a complaint is laid.
In its complaint to the Broad-Based Black Economic Empowerment (B-BBEE) Commission, Siyakhula Sonke Empowerment Corporation (SSC) (Pty) Ltd, alleges that since entering into a partnership with Redpath – in 2016, with a 26% stake in the deal –
For the record, this went nowhere because the complainant had no case but knew (as many do) that if you complain to the commission about racism and they'll jump at it.
Sizwe is obviously a good journalist although he doesn't shy away from sensationalist reporting (if you know what I mean - ‘Racist whites don’t want to see blacks at heritage site’)
Anyway my question is - how did Sizwe find out about these complaints. The answer is that he calls someone at the commission and asks for the information - which is handed to him. This smacks of a gross violation of the BEE Act - id est
13M. Conflicting interests of employees
The Commissioner, members of a specialist committee andany person appointed to or contracted with the Commission to assist the Commission in the carrying out of its functions, must not-
(c) make private use of, or profit from, any confidential information obtained as a result of performing that person’s official functions in the Commission; or
(d) divulge any information referred to in paragraph (c) to any third party, except as required as part of that person’s official functions within the Commission.
But wait - there's more
13N. Offences in connection with Commission
(1) It is an offence to disclose any confidential information concerning the affairs of any person obtained
(a) in carrying out any function in terms of this Act; or
(b) as a result of initiating a complaint with the Commission, or participating in any proceedings in terms of this Act
Why stop there - let's look at Section 195 of the Constitution
195. (1) Public administration must be governed by the democratic values and principles enshrined in the Constitution, including the following principles:
(a) A high standard of professional ethics must be promoted and
(d) Services must be provided impartially, fairly, equitably and without bias.
(e) People’s needs must be responded to, and the public must be encouraged to
participate in policy-making.
(f) Public administration must be accountable.
(g) Transparency must be fostered by providing the public with timely, accessible and accurate information.
Now that I have established that there is a singular lack of integrity when it comes to following their own rules we also need to consider that they are useless at their job. If they were any good then all the organs of state would report on their BEE progress. And I quote
The broad-based BEE codes make it absolutely clear that all organs of state and public entities are “measurable under the Codes.” Strangely enough it is these same entities that have barely paid any attention to a full scorecard. They certainly are aware of the procurement requirements but little else.
The uptake of compliance is so dire that that the BEE Commission, in their National Status and Trends on B-BBEE Transformation Report 2021 observed that of the 326 organs of state (including municipalities) only 82 submitted their BEE report to the commission. Something that the BEE Act compels them to do. Interestingly of these 82 entities, one third of them were non-compliant.
WHY ON EARTH WOULD THE FSCA WANT ANYTHING TO DO WITH THIS LOT?
AND WHY AM I CONCERNED
Paragraph 7.1 of the MOU says
7. THE FINANCIAL SECTOR CONDUCT AUTHORITY'S OBLIGATIONS
7.1. Without limiting the generality of sub-clause 6.1 above and subject to the information being in the possession of the FSCA, the FSCA undertakes to provide the B-BBEE Commission with:
7.1.1. information relating to FSCA Regulated Entities' compliance with the B-BBEE Act and the FS Code; and
7.1.2. information relating to engagements with regulated entities on matters of transformation.
Here we have two entities that know very little (in the case of the BEE Commission nothing) about each other's business. Regulated entities (entities that fall within the regulatory and supervisory scope of the FSCA in terms of the FSR Act - ie every financial institution in the country)are required to report a myriad of things to the FSCA on an annual basis. It's possible that the FSCA then shares that information with the BEE Commissioner who definitely won't know what they have received and the latter decides to investigate this in terms of 13F(1)(d).
And then this gets out to Sizwe who reports it in a sensational way and that institution has to deal with unwarranted reputational damage.
Far too dangerous.
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