"fronting practice"
means a transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of this Act or the implementation of any of the provisions of this Act, including but not limited to practices in connection with a B-BBEE iniative—
| (a) |
in terms of which black persons who are appointed to an enterprise are discouraged or inhibited from substantially participating in the core activities of that enterprise; |
| (b) |
in terms of which the economic benefits received as a result of the broad-based black economic empowerment status of an enterprise do not flow to black people in the ratio specified in the relevant legal documentation; |
| (c) |
involving the conclusion of a legal relationship with a black person for the purpose of that enterprise achieving a certain level of broad-based black economic empowerment compliance without granting that black person the economic benefits that would reasonably be expected to be associated with the status or position held by that black person; or |
| (d) |
involving the conclusion of an agreement with another enterprise in order to achieve or enhance broad-based black economic empowerment status in circumstances in which— |
| (i) |
there are significant limitations, whether implicit or explicit, on the identity of suppliers, service providers, clients or customers; |
| (ii) |
the maintenance of business operations is reasonably considered to be improbable, having regard to the resources available; |
| (iii) |
the terms and conditions were not negotiated at arm's length and on a fair and reasonable basis; |
[Definition inserted by section 1(e) of Act No. 46 of 2013]
Electronic Communications Act, 2005
