Publications
Partners
Johannesburg - 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 R153m 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 R78m into their bank accounts.
Only R27m 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.
- City Press
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 R153m 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 R78m into their bank accounts.
Only R27m 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.
- City Press
