Cipro suspends staff member

The Companies and Intellectual Property Registration Office (Cipro) has suspended a staff member after another three companies were hijacked.

The hijackings - of Remag, Ntiro Technologies and News Caf'e Rivonia - comes after the office last October implemented new measures to prevent hijackings, after Kalahari Resources was hijacked.

At least 11 companies were reportedly hijacked last year, after fraudsters removed legitimate directors and replaced them with others on the agency's database. In October, the office implemented a one-time PIN before changes can be made to directors' details electronically.

Elsab'e Conradie, Cipro's head of communication, marketing and stakeholder relations, explains that the latest companies were hijacked using the manual system. To make changes manually, companies need to hand in proof of identification and proof of the board's resolution to make the changes.

The office has launched an investigation into the fraudulent changes, which aims to also uncover whether any other fraud has been perpetrated on its database. The transactions will also be forensically audited.

Cipro's investigation led to the suspension of one employee as a precautionary measure. Conradie is not sure how long the investigation will take, but says it will be exhaustive. She says Cipro has also implemented further measures to verify the legitimacy of documents handed into its Pretoria office.

The fraud has also been referred to the law enforcement authorities. “Cipro [has] joined forces with various law enforcement authorities in an effort to cull the recent spate of fraudulent, un-mandated amendments to directors of companies,” says a statement from the office.

Conradie says the current IT upgrade will help to eliminate fraud. However, until the electronic content management (ECM) system is implemented, the office can only be reactive to illicit changes and other fraud on its database, as its hands are “somewhat” tied, she adds.

However, the implementation of the R153 million ECM system has stalled, pending the outcome of a court case. The system was meant to move Cipro onto a fully electronic platform and improve its current controls.

Implementation stalled after the contract with Valor IT was canned last May by trade and industry minister Rob Davies. Davies cancelled the deal after a forensic report uncovered irregularities during the tender award process.

Valor IT took the Department of Trade and Industry to court to have the contract upheld, but negotiations between the parties have collapsed and the matter is set to go back to court this year.