Zuma delay puts Cipro in limbo

2011-04-09 10:34

The delay by President Jacob ­Zuma in signing the Companies Amendment Bill into law has ­derailed plans to launch a new commission intended to prevent ­private firms falling victim to ­company hijackings.

Enactment of the bill is ­supposed to give birth to a new companies and intellectual ­property commission that can ­impose tougher security systems to foil fraud, especially the ­hijacking of companies by organised crime syndicates.

The companies commission will be created through the merging of the Companies and Intellectual Properties Registration Office (Cipro) with Intellectual Property Enforcement (IPE), an enforcement arm of the Department of Trade and Industry.

The merger was supposed to take place last Friday, but it was postponed indefinitely when it emerged that Zuma had not yet ­approved the Companies Amendment Bill.

This has left businesses in limbo, not knowing how government will put a stop to company hijackings.

Such hijackings involve having ­directors’ names fraudulently removed from their firms’ boards and replaced with those of the ­hijackers.

Cipro and IPE are also merging to give Cipro the power to regulate businesses and rescue them from lapsing into bankruptcy.

Cipro spokesperson Elsabé Conradie said the organisation had not detected any hijackings since last October. “Security and control measures have been recently updated,” she said.

A R153-million contract to revamp Cipro’s ­electronic content management system was on hold pending a lawsuit by ValorIT, which lost the contract after a ­forensic probe ­uncovered irregularities in the awarding of the contract to the IT firm, Conradie said.

The contract was cancelled early last year by trade and industry minister Rob Davies, but ValorIT is challenging the decision.

Conradie said Cipro had ­concluded a forensic audit report on company hijackings. The report would be used to further tighten the organisation’s security measures to prevent such crimes.

The new commission will continue to ensure a safe transaction ­environment as far as possible, with other new controls and ­verification mechanisms being ­implemented where necessary,” Conradie said.

She declined to disclose the ­contents of the forensic audit.

“The report is still confidential at this stage,” she said.

Company hijackers have even successfully targeted the South ­African Revenue Service (SARS).

SARS spokesperson Adrian Lackay said: “A syndicate led by Pakistani nationals and South ­Africans is alleged to have used electronic spying software to gain ­access to our ­systems.

“They allegedly changed the bank details of legitimate ­companies, with the aim of diverting ­income tax refunds from SARS due to those companies to bank ­accounts under their control.”

Lackay said the hijackers had ­managed to divert R78 million into their bank ­accounts.

Only R27 million had been recovered by SARS, with the help of the banks concerned.

Leonard Brehm, chairperson of the auditing firm Grant ­Thornton SA, said Cipro’s focus on combating company hijackings had resulted in entrepreneurs ­taking longer to register their companies.

This had created a ­registration backlog for Cipro.

Brehm was sceptical that Cipro and IPE were ready to merge to form the commission.

He said: “I am very concerned that Cipro might not be ready to ­convert into the new commission as there are backlogs in the system of registering new companies.”

According to Brehm, the South African Institute of Chartered ­Accountants was helping Cipro to catch up with the backlog.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.