CIPRO acts against company counterfeiting

JOHANNESBURG - The Companies and Intellectual Property Registration Office (CIPRO) has acted to try and stem the registration of a flood of fraudulent duplicate companies. In a practice note issued on Wednesday, and posted on the organisation's website, acting CEO Lungile Dukwana announced the imposition of new controls on CIPRO's name reservation process.

This action follows the publication of an exposé on Politicsweb documenting how counterfeit companies, established through CIPRO, were being used to perpetrate fraud on a massive scale in South Africa (see article). Politicsweb also published a list of 114 companies - registered over the past two years - which it believed to be counterfeit (see here).

Section C of the current Application for Reservation of Name form asks whether the proposed name is associated with "a person, corporation or company? If so, what is the name and number (if a corporation or company) and the nature of the association (e.g. member, holding / subsidiary / director etc.)."

According to the new directives this section was being "used by a number of applicants to misrepresent facts. Applicants have been found to be claiming some form of association with entities that are already registered on our database. At times, this is a deliberate duplication."

To put a stop to such abuses, the Registrar of Companies and Close Corporations, now requires "of all applicants who claim to be having an association with some entity already registered and active in our database, to present written proof of an original letter signed by the most senior officer(s) of the company on the company's letterhead as well as the certified copy of the identity document of the director(s) or a member(s), together with their application."

CIPRO has also terminated, with immediate effect, the facility for a separate name reservation process for shelf company names. This was apparently being abused by certain applicants "to obtain reservation of names identical to names already on the database except for the addition of a sequential number."

The above steps, the new directives state, are being taken to "ensure that further proliferation of these practices is curbed. Protection of the goodwill of entities that have rightful ownership to specific names is very important to CIPRO."

There has been a long standing prohibition by the Registrar of Companies against the registration of new companies with names similar to old ones. According to directives published in 1973 ‘undesirable names' included a "name which is identical to a name already registered, or so nearly resembling such a name as to be calculated to deceive or mislead the public. Only in the most exceptional circumstances will a non-generic identical name be allowed with different descriptive wording for controlled, subsidiary or associated companies."

More recently, in Practice Note no. 1 of January 2008, the Registrar of Companies stated that "any name may be allowed, provided that it does not prejudice the existing rights of any person, or that such a name is, in the opinion of the Registrar undesirable. A name will be considered undesirable if - [inter alia] it is identical or confusingly similar to a name already on the register of the Registrar [or] words pertaining to a trade mark are contained in a name."

The well known companies and organisations counterfeited by fraudsters over the past two years - through CIPRO - include: Adcock Ingram, Avusa Media, Cadac, Distillers Corporation, Eli Lilly, MacSteel, Monsanto, Sun Microsystems, the SA Guide Dogs Association, the SPCA and Trident Steel.

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responses to this article

It takes an article to be published... before some palooka starts to do his job, in order to remedy fraud in an organization which was part of his job in the first place! Zimbabwe here we come! by Ag Shame on August 13 2009, 08:15 Find this comment inappropriate? Report it

corcha@pixie.co.za who is going to pay for this total shambles by dof on August 13 2009, 08:19 Find this comment inappropriate? Report it

Cadres This happens when you deploy cadres to do the job. If you employed people with expertise in the first place this never would have happened. Let the tax payer pay who cares. by Molly on August 13 2009, 09:45 Find this comment inappropriate? Report it

Isn't this... What CIPRO was supposed to be doing in the first place???? That's AA at work right there, another once proud institution becomes a basket case. by donovan on August 13 2009, 10:36 Find this comment inappropriate? Report it

It takes an article...... Sure it did, but thanks to transparency...visible action is being taken, and this is what we expect." Ag shame"'s association of this with Zimbabwe is disingenuous to say the least.We know what is being done as against the pre-democracy era where . .more everything was shrouded in a thick veil. FYI, the exposed crime could have been done by White folks who tend to be majority owners of these shelf companies. Let us therefore not judge until we know, lest we fall into an abyss of overlaying every wrong with race! . .less by Zama on August 13 2009, 10:46 Find this comment inappropriate? Report it

ikaneng@gmail.com this crime was being committed with help from the inside, so i don't see how the issuing of new practice note was ever going to help. the author of the practice note is the same person who was conspiring with the criminals anyway. who's fooling who? by ike on August 13 2009, 15:34 Find this comment inappropriate? Report it

crud squared Do these bonzos really think that by demanding all sorts of authenticated and certifiied documentation they are going to stop the rot? They must be stark, staring mad. The way to stop fraud of this nature is to make sure that the blasted systems . .more are working, not to insist on a minor forest load of paperwork alleging to prove various facts. I am so heartly sick of having to produce I.D. , certified copies of stuff and suchlike because all it does is slow down an already tedious process even furhter without producing an ounce of comfort. Do these upstarts think that certified copies of documents is going to stop the Albanian ( or Xhosa/nigeria) mafia from running rings around them? Halls balls, their own staff are involved up to their necks--- for them it's just a party. . .less by Plutarch on August 13 2009, 17:20 Find this comment inappropriate? Report it

@Zama Your immediate twist of introducing race into the equation indicates that you have little, if any knowledge of dealing with the offices of CIPRO prior to and after 1994. It is also obvious that you do not realize that The Registrar of Companies (now . .more CIPRO), was an instition of utmost integrity, whose protocols up to just over one and a half decades ago were enforced in the interest of good governance, whose integrity has now due to its own maladministration within its rank and file, been reduced to a basket case instituion. In consequence, it may be stated, that most of what has happened may be ascribed to management appointed under the present regime's watch, so consequently I will leave it up to you to apply the little of the grey matter with which you have been blessed!!!! Whether a white, black, pink, etc, member of the public was allowed to transgress any rules, etc. one has to remember that it was allowed under the watch of "CIPRO", who used to be an effective and competent watchdog beyond reproach!!!!!!!!!! Therefore "Ag Shame" might just have a point referring to "Zim, (or shoiuld he/she have said) Zama here we come"!!!! . .less by Compadre on August 13 2009, 22:54 Find this comment inappropriate? Report it

Well done Moneyweb Well done Moneyweb, an achievement to be proud of. by Darwin on August 14 2009, 08:02 Find this comment inappropriate? Report it

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