SCA “opens the floodgates” with B-BBEE ruling – legal expert

The Supreme Court of Appeal’s decision declaring the automatic disqualification of companies that aren’t 51% black-owned for state-owned entity tenders as invalid, opens the flood gates for similar challenges. This is according to attorney and founder of the Legal Affair, Nonhlanhla Mtshali, who tells the Business Hour the November 2020 ruling does not do away with the Broad Based Black Economic Empowerment policy entirely but it does create the precedence for similar challenges at local, provincial and other national departments. Whilst the ruling, if unchallenged by November 2021, widens the pool for companies that can bid for state-owned entity tenders, Mtshali says we do need to be cognisant that the policy was introduced to assist previously disadvantaged South Africans that are in business. The judgment can challenged in the Constitutional Court, by the Minister of Finance’s office, but they are yet to do so.