Beware company clones

Johannesburg - The authorities are urging the owners of companies and close corporations to check whether fraudsters have possibly registered firms with almost identical names.

The Companies and Intellectual Property Registration Office (Cipro) is conducting a comprehensive investigation into the duplication of companies on its database, a situation that might already have led to more than R120m in losses for the South African Revenue Service (Sars).

Existing shortcomings in the Cipro system make it possible for fraudsters to register company names that are almost identical to those of existing legitimate companies.

In some cases the registered details of directors, too, have been changed, making it possible for perpetrators to open new bank accounts.

Payments intended for the legitimate company are then diverted to the 'false' bank accounts.

In January R51m in Sars refunds to Sun Microsystems and SBC International Management was, for instance, diverted to cloned companies in this way, and the fiscus is expected to possibly lose a further R70m or more in the same scheme, reports SARS spokesperson Adrian Lackay.

A Sars employee has been suspended pending the investigation into the R51m fraud, and an individual outside SARS has already been arrested in this connection, Lackay notes. The revenue office is currently working with the Asset Forfeiture Unit in an attempt to contain the additional R70m-plus loss.

Cipro spokesperson Elsabé Conradie reports that some employees are already under investigation and steps will certainly be taken against those found guilty. While she says there is no need for panic, she encourages people to inspect the registrations of their companies and close corporations, as well as lists of directors, on Cipro's website, and inform Cipro of any possible irregularities.

- Sake24.com

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