THE NATIONAL ASSEMBLY

QUESTION FOR WRITTEN REPLY

Question 33

Mr T D Harris (DA-WC) to ask the Minister of Trade and Industry [Rob Davies]:

(1) Whether, with reference to a recent media report alleging that the Companies and Intellectual Property Registration Office (CIPRO) has been used to defraud certain companies (names and details furnished- See attached) through the registration of duplicate companies and fake company directors, any action has been taken; if not, why not; if so, (a) what action, (b) which companies have complained about duplicate companies or fake company directors and (c) against which CIPRO officials was action taken;

(2) Whether any steps will be taken to address these problems; if not, why not; if so, what steps;

(3) Whether CIPRO will provide the name or names of person or persons responsible for deregistering the legitimate directors of BLSA Industries on 8 April 2009; if so,

(4) Whether any disciplinary action has been taken in this regard; if not, why not; if so, (a) what action and (b) what are the further relevant details? CW45E

Response:

(1)(a)   CIPRO became aware of the fraudulent registration of duplicate companies and fake company directors in January and February 2009  and took a decision to terminate the electronic lodgement of changes.

The electronic lodgement of requesting an associated name of an existing company/close corporation was terminated and a Practice Note No. 5 was issued informing clients of the new procedure.

(1)(b) CIPRO is not in a position to provide information until the investigation process is completed.

(1)(c) Based on the outcome of a preliminary investigation into possible fraudulent activities, five (5) CIPRO officials were suspended, pending the completion of a full investigation.

Further internal investigations are underway to identify perpetrators. Three agents who registered these entities were identified and found not to be working for CIPRO. Their details were handed over to the SAPS and a criminal case was opened.

(2) A verification process for any amendment on directors of a company was implemented and strict controls were implemented in the electronic lodging of changes of director's information.

Additional documentation is also required from applicants in lodging name reservations relating to existing companies.

(3) CIPRO is not in a position to provide more details relating to specific fraudulent activities at the moment as it might jeopardise the investigation.

(4) Based on the outcome and recommendations of the full investigation, action will be taken in terms of the disciplinary procedures of CIPRO in line with the Public Finance Management Act and the Public Service Code of Conduct Procedures. As allegations in this matter are also of a criminal nature, CIPRO will proceed with criminal charges against perpetrators in addition to the internal disciplinary steps.

THE NATIONAL COUNCIL OF PROVINCES

QUESTION FOR WRITTEN REPLY

Question 34

Mr T D Harris (DA-WC) to ask the Minister of Trade and Industry [Rob Davies]:

(1) Whether the Companies and Intellectual Property Registration Office (CIPRO) regards certain companies as fraudulently registered; if so, what are the names of the officials who approved the registrations of the names of each of these companies;

(2) Whether any disciplinary action has been taken against these officials; if not, why not; if so, what action;

(3) whether the officials concerned are still responsible for vetting names for approval during the period 1 August 2009 up to the latest specified date for which information is available; if not, why not; if so, what are the relevant details? CW46E

Response:

(1) Preliminary investigation of the 114 companies it has found that the correct registration procedures were followed. However, the investigation also pointed to a possibility of misrepresentation on the part of companies. These companies were registered as associated companies of the main companies already registered with CIPRO. As soon the full investigation is completed, the required corrective steps will be taken based on the findings.

The Department is not in a position to divulge the names of the officials who registered the companies pending the outcome of the investigation.

(2) Based on the outcome and recommendations of the full investigation, action will be taken in terms of the disciplinary procedures of CIPRO in line with the Public Finance Management Act and the Public Service Code of Conduct Procedures.

(3) Internal investigations are underway to ascertain whether there was any wrong-doing by any CIPRO officials in this regard. Should evidence be found of any misconduct by officials, the necessary disciplinary process will be undertaken. All allegations in this matter are also of a criminal nature. CIPRO will proceed with criminal charges against perpetrators in addition to the internal disciplinary steps.

Source: Department of Trade & Industry

Click here to sign up to receive our free daily headline email newsletter