Sakeliga ramps up legal fight against BEE “extortion,” targeting NHI, Employment Equity, and more…

With Sakeliga's launch of a critical legal challenge to reverse harmful state overreach and BEE in the property sector, its CEO Piet Le Roux warns that the business interest group will have "more and more concurrent cases on these critical matters, not only on BEE in the property sector, but BEE in competition law, BEE in health products" – and is building "a wonderful case" against the NHI. "We're going to take this Employment Equity Amendment Act, which is very harmful in itself. It's being prepared for implementation later this year." Sakeliga also opposes government plans for a R100 billion Transformation Fund. "… they've just effectively announced that they want to have another extortion racket where they want to put money in a government fund. It's a direct attack on white businesses, and it's going to be very harmful for everyone in this country through a multiplier effect that we've already seen in the public sector, and we must prevent this from happening in the private sector.".Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Highlights from the interview .In a recent interview, Piet Le Roux, CEO of the business group Sakeliga, discussed a critical legal challenge they have launched against the expansion of Black Economic Empowerment (BEE) requirements in the property sector. Sakeliga is contesting the Property Practitioners Act, which includes two main provisions they oppose. The first is the broadening of the definition of "property practitioners" to include a wide range of businesses, beyond just estate agents, to include mortgage originators, property developers, and more. Le Roux argues this expansion is unnecessary and burdensome. The second challenge is the requirement that property practitioners must provide a BEE certificate before obtaining a Fidelity Fund certificate, which is necessary for business operations. Le Roux claims this link between BEE compliance and the ability to handle trust money is both irrelevant and unconstitutional..Le Roux emphasised the significant financial impact these regulations could have, potentially making it difficult for many businesses to operate. He described this case as critical for preventing the further entrenchment of BEE requirements in the sector, pointing out that such policies harm both white and black businesses by stifling overall economic growth..The interview also touched on Sakeliga's broader opposition to the government's proposed 100 billion Rand Transformation Fund, which Le Roux criticises as a direct attack on white businesses. He argued it would harm the economy overall, creating a "multiplier effect" similar to the negative impacts of BEE in the public sector. Despite challenges, Le Roux expressed confidence in their case and continued efforts to oppose harmful BEE policies..Edited transcript of the interview ___STEADY_PAYWALL___.Chris Steyn (00:01.4).A critical legal challenge to reverse harmful state overreach and BEE in the property sector has been launched by business interest group Sakeliga. We speak to Sakeliga CEO, Piet Le Roux. Welcome, Piet..Piet Le Roux (00:15.051).Hi Chris..Chris Steyn (00:17.238).What is the purpose of this court case being brought by you?.Piet Le Roux (00:21.57).The court case is to stop the expansion of BEE in the property sector. What's happening is that the current Act, the Property Practitioners Act, makes some elements of BEE compulsory. And we say that is not an acceptable arrangement, it's an acceptable thing to do for government. And so we are challenging the Property Practitioners Act to have two things changed. .The first is the definition of what a property practitioner is. And the second thing is to remove the requirement to provide a BEE certificate before you can have a Fidelity Fund certificate. .And let me explain each of these in turn. First, the expansion of the definition. So in 2022, the new Property Practitioners Act took effect and it replaced the old Estate Agencies Affairs Act. And what that did was it redefined what it meant to be a property practitioner from being just an estate agent and an entity that has to hold some money in trust for facilitating a transaction between a buyer and a seller. And it added 11 more categories to that. And today, 12 different categories of businesses are classified as property practitioners. These include mortgage originators, bond auctioneers, property auctioneers, property developers, people who market property, property management agents, home estate owners associations, and now all of these currently suddenly fall under this expanded scope of regulation. And so we say this is overly broad and for a non-legitimate purpose, a new regulator now just interferes and sets onerous requirements for doing business, which does not serve the goal of serving, handling trust money well. So we're attacking the definition of a property practitioner. We want to reset that and the scope of the regulation to a much more smaller and arguably legitimate domain. .The second thing is we need to remove the requirement to have a BEE certificate before you can have a Fidelity Fund certificate. The Fidelity Fund certificate is a certificate which the access all property practitioners need to have. And that's something that's supposed to signal that you are in good standing with regard to handling trust money well and that people who make use of you will be insured….Piet Le Roux (02:46.082).…in cases where you misuse or mishandle the trust money. Now, what's happened under the new act is that in order to get a Fidelity Fund certificate, you first need to get a BEE certificate. And that's a completely illegitimate connection. Being Black Economic Empowerment compliant or certified has nothing to do with your ability to handle trust money wealth. That's an illegitimate purpose. It's not a legitimate government purpose. So we're attacking that. It has to be removed because it's a Trojan horse. That requirement is what's going to drive BEE and make it an entry requirement for being a property practitioner. It has to be removed..Chris Steyn (03:23.918).If this court action succeeds, how big a difference will it make to the property sector? I am thinking in terms of financial terms..Piet Le Roux (03:32.758).Yeah, it can be make or break for many, many businesses. And it'll certainly, if we allow this to stand, what the property practitioners regulatory authority and other government entities relevant to this sector intend to do is scale up BEE and just expand more and more how much it'll make that a requirement for participation. So I'll give you an example. Last year, the property practitioners regulatory authority, which is the statutory body under this act, what they then did is they just decided what they're going to interpret as a BEE certificate is only a certificate with level eight or more as a score. And so even though the act just says you have to provide a certificate of, it doesn't say what the minimum level should be, this regulatory authority said, well, we just want level eight. Anything below that, we're not gonna give you your Fidelity Fund certificate. And they actually denied property businesses, dozens of them in the period around March last year, Fidelity Fund certificates. it's existential to businesses what's going on here. We were able to push them back on that through threats of litigation, correspondence, public campaigning and so on. And other organisations worked on this as well. So we could push that back. But that's certainly where the regulatory authority wants to take it. So to solve that problem on a long term basis, we need to remove these things in the act..Chris Steyn (04:59.032).Do you think you have a very strong case?.Piet Le Roux (05:01.632).Yes, we have a strong case. The papers have been filed last year already, but we only announced last week because there was a recess in the courts and so everything wasn't yet served to the relevant parties. So the case is up and running. The case is strong. We have a great legal team behind it. The same legal team, same attorneys that have helped us win many cases before, including in the Constitutional Court, the Preferential Procurement Regulations, which was the first major reversal of a BEE type law in South Africa. We have the same, we've built on the lessons we've learned and we are confident that this is a strong case. .Now, but it is a politically contentious case possibly. And the court may interpret it as such, although we've taken care to focus on the relevant legal aspects and to get things as unemotional as possible because this is very clear legal case why this isn't allowable. It's not a legitimate government purpose. It's unconstitutional and so on. It's also very harmful, but of course, because it's politically complicated, that might lead to variations in what to what we think is the correct judgment. We might get something else. This is going to be a continued risk of the next 10 years as Sakeliga a ramp up our litigation. We will have more and more concurrent cases on these critical matters, not only on BEE in the property sector, but BEE in competition law, BEE in health products with taking building a wonderful case against the NHI. We're going to take this Employment Equity Amendment Act, which is very harmful in itself. It's being prepared for implementation later this year. So as we scale up our caseload and the number of concurrent cases, I have to say at some point we won't get all we ask for all the time just because of the contentious nature of what we're litigating for. But it's the best case that can be made out. It's a strong case..We're quite confident in this one, actually. So yeah, we think it's a great case to support..Chris Steyn (07:05.198).Well, meanwhile, there is controversy about government's 100 billion Rand Transformation Fund. What are your thoughts?.Piet Le Roux (07:14.516).It's a direct attack on white businesses in South Africa. It proposes making 3% compulsory tax and then putting that into a government fund, which will be a way to siphon money to preferred government associates, preferred political people around government. So we oppose it because it's a direct attack on white businesses and that's unacceptable..But not only is it a direct attack on these businesses, it is also a very harmful thing to do for the general public. We've already seen how Black Economic Empowerment requirements ruin the public sector. It has a multiplier effect, a colourblind multiplier effect across the economy to implement BEE in the public sector..What this is doing is trying to compel the private sector to participate in BEE and we will see the same colourblind negative multiplier effect across the economy. .So even though the government thinks it'll tax white businesses and it's willing to harm white businesses in order to serve what it will try and sell as the laudable goal of creating flourishing black businesses, not only will it not achieve that goal, but it will also harm the general economy, including white people, including black people, including white businesses, including black businesses, because they are already interlinked in this economy. so harming one piece of the economy will detract from the productivity and the growth for everyone in it.So that's why we oppose it. It's a direct attack on white businesses, and it's going to be very harmful for everyone in this country through a multiplier effect that we've already seen in the public sector and we must prevent this from happening in the private sector..Chris Steyn (09:10.414).Now would there be a legal basis to challenge that fund?.Piet Le Roux (09:14.722).Well, thing to notice that this is currently just a vague announcement. It's definitely in writing in the government or in the Department of Trade, Industry and Competitions internal documents. We've seen some of it. So it's definitely in writing and officially the plan there. And the idea there, as far as we can tell, is to have this in place by time of the next election. So within the next four and a half years..But we've seen many announcements before of infrastructure funds. We've heard about bullet trains and smart cities near Lanseria. So many government plans just never come to fruition. Now this one is unfortunately, though quite a way off, slightly more realistic unfortunately than a smart city or a bullet train in the sense that government doesn't really have to build something..They are just and they've just effectively announced that they want to have another extortion racket where they want to put money in a government fund. And they basically want to use their powers of taxation and of regulation and of legislation to achieve that. So it's technically much easier to do than build a new city or repair a bridge or repair a road or get ESKOM working. So but it has to be opposed therefore. We are not too hurried about that. There's lots of time to prevent this. This case in specific, the 100 billion infrastructure fund, there will be time. There are various grounds in law that it can be used. For example, there's the complication of the national revenue funds and it has to go through the national accounts. It can't really go straight into a direct fund. There will have to be amendments to several pieces of legislation probably to get this done – and then there can be constitutional challenges even though if the legislation changes. So lots of legal hurdles before this can be done. And as far as this thing actually progresses, then we will certainly be right there to try and stop it. And we intend to stop this and other forms of BEE. It's very harmful. And Chris, this thing has struck a chord. We haven't seen this level of public dismay….Piet Le Roux (11:28.628).with the government pronouncement in quite a while. Just look at the comment sections below the reporting. Just look at what's going on on Twitter. Just look at the YouTube videos, how many views this gets. People are so sick and tired of the, what is effectively theft and extortion for sectional purposes and foolish endeavours from the state side. And I think this just goes across so many sections of society. .So definitely, normal businesses in South Africa, white businesses who are the direct target of this announcement, as well as black businesses. Any real businessman knows this is a folly, a very harmful proposal. And just the general public have seen for 30 years that BEE has kept delivering lots of money for a few people with the promise of flourishing black communities. But it's actually been very harmful to black communities as well..So I think the public outcry is notable here and that's wonderful to see that the state is losing the ability to sell BEE as a good thing because it's not, it's very harmful..Chris Steyn (12:41.016).Thank you. That was Piet le Roux Sakeliga CEO speaking to BizNews – and I'm Chris Steyn. Thank you..Piet Le Roux (13:02.626).Pleasure, Chris..Read also:.Corruption busting, cost-cutting & construction building a better KZNHappy Capetonians propel the Mother City to world's best city status – Time Out's Andrew Hallett🔒 RW Johnson: Cape Town's rise comes at a cost

Sakeliga ramps up legal fight against BEE “extortion,” targeting NHI, Employment Equity, and more…

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