Bosasa submitted tender documents with incorrect BEE status

Former Bosasa chief operating officer (COO) Angelo Agrizzi has told the commission of inquiry into state capture on Monday that the company set up complex and detailed arrangements of “fronting” to misrepresent its black economic empowerment (BEE) status so it could score tenders with various government departments.

Agrizzi told the commission that in South Africa BEE was not “truly representative by many companies and we are all guilty of it”.

“But what is most concerning was that if you set up a complex network of subsidiaries and various entities and trusts and you make it very complicated, the identification of the true BEE of a company is virtually impossible,” Agrizzi said.

He added he was not saying that this practice was not only endemic to Bosasa but he knows how it happened.

“And basically to move from a premise where you are BEE level four to a BEE level two or one, unless you have the right credentials,” he said.

Agrizzi told the commission that credentials would be manufactured to improve a company’s BEE status.

“So, I would manufacture credentials by putting somebody in that place, giving them the shares, giving them full autonomy, shareholding, but at the same time I’m having an agreement on the side which basically says you don’t own the shares until such time that you pay for them,” Agrizzi said.

He added that though there was no illegality about this practice. A company cannot be regarded to be BEE compliant if it still holds the shares.

“And what started to happen is that it would get worse and worse and worse. So, there is an elaborate masking, fronting is the right word, of BEE and it needs to be uncovered and it needs to be fixed up,” Agrizzi testified.

Agrizzi said he was prepared to assist in further investigations into these complex and detailed arrangements.

The tender documents that Bosasa presented to various government departments did not reflect the true BEE status of the company, Agrizzi said.

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