Risk of Losing Ownership Points & Fronting Risk

According to a press release issued by the DTI on 14 April 2019, the B-BBEE Advisory Council expressed their concern regarding Broad-Based Ownership Schemes and Trusts that do not meet the ownership requirements. In recent years the B-BBEE Commission has been targeting Trusts and Broad-Based Ownership Schemes for investigation.

Alternative Prosperity has developed the following value proposition with regards to Trusts and Broad-Based Ownership Schemes:

Offering phase 1:
Desktop Risk Review of Trust/Broad-Based Ownership Scheme.

Description / Activities
Review of Trust Deed and Scheme rules and evaluation against requirements of the B-BBEE Act as amended, B-BBEE Codes and the B-BBEE Commission’s interpretations.

Deliverable: Compliance and risk analysis report. The report identifies compliance and fronting risk and rates the level of risk against a likelihood and impact scale.

Offering phase 2:
Implementation Risk Review.

Description / Activities
The Implementation Risk Review should be engaged as part of the above Desktop Review. Implementation of the Trust and Scheme rules and requirements is reviewed and evaluated. The Trust and Scheme are evaluated from the point of view of substance and alignment to the objectives of the Act.

Deliverable: Review report on implementation risk. The report identifies compliance and fronting risk and rates the level of risk against a likelihood and impact scale.

Benefits / Value:
Identify and mitigate B-BBEE scorecard risk.
Identify and mitigate compliance and fronting risk.
Identify and mitigate reputational risk.

Contextualising Workshop Invitations will follow soon.