Trade union slams government’s new R100 billion BEE ‘looting fund’

Trade union Solidarity said it has issued the government a letter of demand regarding its handling of South Africa’s new Black Economic Empowerment (BEE) Transformation Fund.

This comes as the Department of Trade, Industry and Competition (DTIC) is planning to offer local companies new incentives to capitalise a fund that will be used to promote BEE in South Africa.

Under this proposal, companies can contribute 3% of their net income to a so-called Transformation Fund to earn double the BEE points currently available for their contributions towards enterprise and supplier development.

On 2 February 2026, Solidarity said it issued a letter of demand to the DTIC following alleged contradictions between the answers the trade union received to requests for information and those the department has circulated in the public domain.

The trade union said it requested information regarding this fund from the DTIC under the Promotion of Access to Information Act (PAIA).

However, Solidarity deputy chief executive Anton van der Bijl claimed there were material contradictions between what the trade union was told and what is currently being circulated in the public domain.

“There was clear dishonesty. South Africans were deliberately misled,” Van der Bijl alleged in a press statement released on Tuesday, 3 February. 

According to Van der Bijl, Solidarity formally requested access to documentation regarding the Transformation Fund, reflecting the costs, feasibility, governance frameworks, and financial implications as early as 2025.

However, the union was allegedly told that such records did not exist or that they formed part of an ongoing policy process.

“In May 2025, the department explicitly claimed that the Transformation Fund had not yet been sufficiently developed,” Van der Bijl said. 

“This was used as the reason why key documents, cost calculations and impact studies could not be disclosed at the time.”

Now, however, Van der Bijl claims it is being reported that the fund could be ready to launch as early as next week, “with billions of rands in financial commitments, a fixed governance model and a defined incentive structure”.

‘Unlawful, irrational and constitutionally invalid’

Van der Bijl claimed that this means the DTIC’s initial explanation following Solidarity’s request for information “is simply no longer credible”.

He argued that a fund that reportedly already has early investment commitments of R13 billion could not have been developed without extensive internal studies, financial modelling and approval processes.

These funding commitments include investments from public entities such as the Unemployment Insurance Fund (UIF), the Industrial Development Corporation (IDC) and the Development Bank of Southern Africa.

“Furthermore, serious questions must be asked about who authorised a public fund administrator such as the UIF to utilise contributors’ money in this manner,” Van der Bijl said.

Solidarity further warned that any implementation of the Transformation Fund without full compliance with the Public Finance Management Act (PFMA) would be unlawful, irrational and constitutionally invalid.

“This looks and smells like another cadre-government looting fund. There is no reason why the public should suddenly assume that the fund will be managed honestly or lawfully,” Van der Bijl alleged.

In its letter of demand, Solidarity formally requests that the DTIC provide, without delay, all documentation and information relating to the redesigned Transformation Fund.

Furthermore, the union requests that the department not proceed with the implementation of the fund until this information has been made available.

Van der Bijl argued that taxpayers have a right to know how their money is being used.

“Solidarity will not stand by while billions of rands in public funds are spent without transparency, proper oversight and legal compliance – especially by a government with a poor record of financial management and corruption,” he said.

Daily Investor reached out to the DTIC for comment regarding Solidarity’s claims. While the department confirmed it had received Solidarity’s letter, it chose not to address its contents through the media.