NEWS & ANALYSIS

Yengeni: AG must investigate CIPRO - DA

Tim Harris asks why convicted fraudster was not placed on disqualified directors register

Yengeni directorship: the Auditor General must investigate CIPRO's role

I am today writing to the Auditor General, to request an urgent audit of the Disqualified Directors Register.

On Monday I laid a criminal charge against Tony Yengeni following reports that he holds directorships in six companies - despite the fact that Section 218 of the Companies Act disqualifies anybody convicted of theft, fraud, forgery or perjury from being a company director.

However, Cipro is clearly in the wrong here too. Mr Yengeni was convicted of fraud five years ago, yet even though Cipro is legally mandated to keep the Disqualified Directors' Registry up to date, Mr Yengeni's details have apparently not yet been added to it.

This is not acceptable - we have a law, it is explicit in what it demands, and a state agency is failing to follow through on it. The result of this is that someone who should have been barred from becoming a director has seemingly been allowed to get away with a breach of the law.

The Director-General of the Department of Trade and Industry, Tshediso Matona, says CIPRO is not to blame because they cannot be expected to know "what each and every director on the database is up to on a day-to-day basis", but that explanation misses the mark by miles. The database is meant to be updated as-and-when a person is formally convicted of fraud or corruption, not based on directors' day-to-day activities.

The issue at stake is the fact that the database appears not to have been kept up to date at all.

Cipro claims that it is dependant on court orders supplied by the various Registrars of Court, in order to populate the Disqualified Directors Register, but that "some court orders are still outstanding from January 2006 and therefore, the register is not be [sic] up to date". We are therefore also calling on the Auditor General to establish the degree to which Registrars of Court have still not provided the necessary details, and present these findings to both the Trade and Industry and Justice portfolio committees, and to the respective ministers.

One of CIPRO's obligations is to uphold the stipulations of the Companies Act. Despite Minister Rob Davies much-vaunted reforms of CIPRO, the database seems to be at odds with the requirements of the law. The requested audit will allow us to know just how deep these inconsistencies run, and will allow for a proper assessment of the path forward from here.

Statement issued by Tim Harris, MP, Democratic Alliance shadow minister of trade and industry, November 3 2010

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