Con-prone Cipro in new move to foil fraud

The red-faced companies office, Cipro, has launched a new offensive against fraudsters.

The office was most recently embarrassed when The Sunday Times registered a close corporation, FirstRand Investments CC, using fake identity numbers and despite the name being almost identical to that of an existing company belonging to the JSE-listed FirstRand group.

Cipro - which is meant to safeguard the integrity of South African corporate records - was ridiculed for falling for the newspaper's con because it had pledged that the loopholes in its systems were plugged last year.

Yesterday, Cipro's acting CEO, Lungile Dukwana, announced that the office would from now on require "certified copies" of green identity documents for all its transactions.

Dukwana said people registering as directors, shareholders or accounting officers must now provide certified identity documents.

Until now, people could register a new entity without providing any documentary substantiation - as the Sunday Times did.

Dukwana said this change was introduced because Cipro was "reviewing" its controls.

"The recent review confirms that Cipro processes require new measures which will assist [us] in fighting and reducing fraud and corruption," he said.

In an interview last week, the director-general of the Department of Trade and Industry, Tshediso Matona, promised that "a full investigation" is taking place into how FirstRand Investments CC was registered at Cipro.

Cipro had claimed that it had radically improved its security since its systems were hijacked by criminal syndicates last year. The syndicates succeeded in registering cloned companies, including SBC International Management Services CC - abducting the identity of SBC International Services Inc - to steal R32-million in tax refunds meant for the real company.

Cipro spokesman Elsabie Conradie confirmed that, though Cipro suspended five staff members in connection with the revelations of last year, none had been disciplined.

"Two have resigned and in another case we could not find enough evidence to process," said Conradie.

When asked why the remaining employees were still at work at Cipro, Conradie said: "I don't have that information and, anyway, I think it is a bit ridiculous to bring that up now."

But questions remain about how Midian Hlabano, who is supposedly "blacklisted" by Cipro, was able to register the fake FirstRand Investments at Cipro.

When contacted, Hlabano admitted that he is blacklisted by Cipro and can no longer register as an accounting officer for a company.

He explained that he registered the Sunday Times company "on behalf of" his daughter, Sifiso.

"I wasn't trying to get around the blacklisting," he said.

Hlabano said he was "most surprised" that the name, FirstRand Investments CC, was approved even though there is an existing company with a similar name.

He describes himself as a "victim" of Cipro's shoddy systems.

He said the name should not have been approved by Cipro, given that there was a company with a similar name.