While admitting that it was rocked by auditors and the board as a “reportable irregularity”, Johannesburg Stock Exchange-listed Spar yesterday denied widespread claims that the grocery chain misused black economic empowerment (BEE) loans to help white retailers, at a disadvantage. black franchisor. Black Business Council (BBC) findings report angered by reports of independent investigative findings showing: -Allegations that Spar used BEE loans to bail out white retailers. – Questions about the resignations of chief executive Brett Botten and former board chairman Graham O’Connor. – Manipulation of store values, …
While admitting that it was rocked by auditors and the board as a “reportable irregularity”, Johannesburg Stock Exchange-listed Spar yesterday denied widespread claims that the grocery chain misused black economic empowerment (BEE) loans to help white retailers, at a disadvantage. black franchisor.
Report findings
The Black Business Council (BBC) was outraged by the report on the findings of an independent investigation which showed:
-Allegations that Spar used BEE loans to bail out white retailers.
– Questions about the resignations of chief executive Brett Botten and former board chairman Graham O’Connor.
– Manipulation of store values, reported fictitious loans and discrimination against black franchisors.
‘Irregularity of debt is not a misuse of BEE
Setting the record straight, a Spar spokeswoman said the company regretted “the anxiety and worry caused by the recent media coverage”.
“The loan occurred five years ago and has been reported as a reportable irregularity to the Board of Independent Auditors. There are two other similar loans, amounting to three R11 million.
“A thorough investigation of loans to retailers over the past five years no longer raises concerns. Reputation rebuilding is underway to restore confidence in the good brand,” said the spokesperson.
He said the loan recognized by the auditor and the board as a reportable irregularity did not indicate “BEE loan abuse”.
Spar, the spokesman said, would welcome engagement with the BBC “to correct wrongdoing and false allegations”.
The BBC’s chief executive, Kganki Matabane, said black businesses were “outraged by the developments at Spar, suspecting that there are many other private companies involved in the practice”.
“Most private companies do not implement economic transformation with actions, but only with words. This is fronting and is a criminal activity punishable by law. Fronting retards progress because the benefits never reach the real benefits.
“Many companies do not embrace the spirit of transformation but engage in tick boxes, to earn BBBEE (Broad Based Black Economic Empowerment) points.
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Experts weigh in
Policy analyst Dr Nkosikhulule Nyembezi described the Spar group’s widespread rebuke as “the kind of human firework that sometimes lights up the political sky, before once again fading into obscurity”.
He said: “The revelation of the irregularities that have led to economic transformation in this country is shocking and disappointing, because the country needs business leaders with high ethical standards to attract investment and realize economic growth.
“The story of the personal enrichment of the elite coincides with the corrupt side of commercial transactions that undermine our democracy. The ideas represented have a more complete pedigree. Our collective message is that private companies must pull up their socks to fight corruption.
Center for Alternative Information and Development economist Dominic Brown said the Spar case study showed that “BEE has failed to change ownership at the top – from white to black, even on its own terms”.
“BEE makes the majority of the economy poor and insecure. Therefore, BEE does not lead to a true transformation and in general, it is an inadequate policy to distribute ownership in the economy and reduce the concentration of ownership and wealth.
“More importantly, BEE does not transfer the ownership of assets in the economy to the majority of people. Instead, it continues historical inequalities and enriches a handful of blacks who join the elite and rich of the country, through the use of BEE and sometimes through access to the state. Those responsible must be responsible.”
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