Authored by Amber Kardamilakis.
The June 2026 judgment in Johannes v Waterzone Proprietary Limited and Others, arrives at a moment when broad-based black economic empowerment sits at the forefront of social and political debate. The decision is notable for its pointed criticism of BEE arrangements that are allowed to become hollow, criticising both the measured entity and the BEE shareholder for permitting that to occur over more than a decade.
An arrangement gone awry
Around 2010, Ntimeng Johannes was approached to acquire a 26% interest in Waterzone so that the company could meet the BEE requirements of its mining-industry customers, and he was appointed as a director. In February 2020 he entered into an option arrangement to acquire a further 25%, which together would have produced 51% black ownership, but the court found that the option was never formalised or exercised. After roughly 14 years, Johannes was told in August 2024 to "make way" for a black woman who could improve the company's scorecard; when he refused to resign and transfer his shares, disciplinary proceedings followed.
Substance over form
The court held that the intention of BEE is not merely to redistribute money or satisfy compliance checklists, but to secure effective participation by black South Africans and the transfer of knowledge, experience and business acumen. Waterzone, it found, had used Johannes for his status to win contracts without involving him in operations, finances or governance, denying him meaningful access to information and the participatory role the legislation contemplates.
Responsibilities on both sides
A company must therefore provide genuine operational involvement, ensure access to financial and corporate records, facilitate skills transfer, document all arrangements fully, and treat the BEE partner as a real stakeholder rather than an interchangeable compliance credential. Yet the court did not absolve Johannes: a BEE partner must take the arrangement seriously, demand board packs and financial statements, enforce shareholder and director rights, attend meetings, and refuse to let hollow structures persist.
The judgment is a cautionary tale for all parties. BEE done properly benefits everyone; BEE treated as a formality benefits no one and, as this case shows, eventually ends up before a court.
Johannes v Waterzone (Pty) Ltd and Others (4669/2024) [2026] ZAMPMHC 39 (17 June 2026)