July 12, 2004

By Margie Inggs

Durban - Corporate Consultants, a company specialising in cleaning up fake black empowerment firms, has succeeded in flushing out 200 offenders over the past four years.

Sbu Sihlophe, one of the company's three partners, yesterday urged the government to completely overhaul the provincial and municipal databases.

"Employers use their employees to penetrate empowerment contracts without sharing the profits, but once on the database, [they] get rid of them," he said. "Fronting should be criminalised because companies are fraudulently stealing their employees' money and opportunities, but there is currently no legislation prohibiting the practice "Most people in this situation try seeking legal assistance but give up"

Sihlophe, himself an angry victim of fronting, started Corporate Consultants to help other black workers whose employers have taken advantage of their colour to further their own ends.

Employed as a sales representative by Natal Stainless Steel in 1999, Sihlophe was stunned to discover that he was officially a director of the firm, though he had never been invited to attend a board meeting and did not even know where the company banked.

"I felt insulted but I had no one to turn to for help. Most people caught in this situation try seeking legal assistance but give up because they cannot afford the fees," he said.

His company emphasised surgery rather than exposure, to ensure that workers reaped the benefits of the company's empowerment claims.

"We negotiate with the offenders, either to ensure that the employees are treated as bona fide directors or to seek a financial settlement when tension and mistrust make this too difficult."

Corporate Consultants' fees are paid by the employers, usually without resistance, as the alternative is a Commission of Conciliation, Mediation and Arbitration hearing or liquidation if they claim not to be making money.

Sihlophe's firm was able to gain access to employers' financial records, supported by original bank statements, through the rights given to his clients by the Access to Information Act.

Corporate Consultants is now being put to the sword by a Durban stationery company, which has obtained a R100 000 default judgment against it for damages.

The case involves a bogus subsidiary with two black directors - actually salaried employees of the mother company - who each allegedly own 40 percent. The balance, Sihlophe claims, is held by an Indian woman, who just happens to be the daughter of the mother company's owner.

"The women are aware that they are being used as each time a contracting company attempts to verify the shareholding; they are taken to a ghost building for the meeting," he said.

"While one of the women is up in arms against her employer, she is fobbed off by being told that the company is not making any money. The other employee, who has resigned due to ill health, has settled for R2 000."

"One of the main problems in the perpetuation of this problem is the ignorance of our people, who often settle for very little out of sheer ignorance and financial desperation."

Sihlophe said Corporate Consultants was sometimes approached by resentful employees but often also tipped off by competitors because of the unfair advantage gained by black empowerment.