JOHANNESBURG - At the end of November last year Coca-Cola Africa, a wholly owned subsidiary of the Coca-Cola Company, was hijacked. All the legitimate directors were deregistered by a criminal syndicate on the Companies and Intellectual Property Office (CIPRO) database and replaced by one ‘Samuel Sadike'*, aged 34.
This case is significant not just for the brazen way the syndicate went after one of the world's most famous companies, but because it occurred after new security measures were implemented which CIPRO was initially confident had put a stop to the problem. In mid-December last year Politicsweb ran a brief report on the incident. However, we are now able to disclose how the syndicate was able to simply walk around these new controls.
According to new requirements introduced by CIPRO in September 2010 in order for a company to change its directors it had to provide the following: certified copies of the IDS or passports of the new and serving directors; a certified copy of an extract of the minutes with the resolution to change directors; and a written mandate from the CEO or Managing Director of the company.
These criteria have greatly increased the burden on legitimate companies. It is difficult and time consuming, for instance, to collect the IDs of all a company's directors - particularly when they may be travelling around the world (or the country) much of the time.
However, they do not seem to have placed too large an obstacle in the path of CIPRO fraudsters. In the Coca-Cola Africa case they simply forged all the required documentation.
Minutes of a meeting ‘held' on November 11 2010, and attended by ‘all' Coca-Cola Africa's directors, were submitted at which a resolution was passed which resolved that Samuel Sadike be appointed a "director/s of the company and that the appointment be registered with Cipro." It was resolved "that the resignation of Mojapelo Euniccah Maggie Sethololo, Egde William Ebot Ako, Ralebepa Ngoako Joseph, Asiko William, Maditsi Alexander Komape, Naidoo Brett as director of the company be, and is hereby accepted and be registered with Cipro."
The fraudsters submitted "certified copies" of the identity documents of all the directors. These appear to be forgeries as well. The fraudsters seem to have taken details - such as ID numbers - readily available on the CIPRO database and used these to create an image of the relevant page of the directors identity documents. A picture of a person - of the same race and sex of the target - was then inserted.
A number of these ‘copies' were stamped with a SAPS stamp with the following details: "CLIENT SERVICES CENTRE - 30 OCT 2010 - P BAG 109, MIDRAND, 1685 - SOUTH AFRICAN POLICE SERVICE" Some anonymous ‘police inspector' certified that "this document is a true reproduction (copy) of the original document which was handed to me for authentication."
The aim of most CIPRO based frauds is to set up a bank account - controlled by the criminals - in the company's name. Changes have to be made on CIPRO first because the bank branch will check back with them to verify that the person attempting to open an account is actually a ‘real' director. Once such an account has been established the syndicate can carry out any number of frauds: For instance, stolen checks can be deposited or attempts made to change the company's legitimate bank details held with their clients or the South African Revenue Services.
In the case of Coca-Cola Africa the fraudsters, having effected the change of directors, then moved to set up a business account in the company's name with Absa in the Western Cape. In reply to a request for comment on the matter Absa spokesperson John Dludlu stated: "Absa always check and compare details of directors and members with Cipro's records. In instances where we have any suspicion of wrong-doing or have identified fraud, we act swiftly to prevent any losses. As to the matter you refer to, we have not suffered any losses."
Politicsweb understands that the hijacking was picked up by Coca-Cola quite soon after the changes occurred, and the company suffered no losses.
The Coca-Cola Africa case can be linked to numerous other CIPRO hijacking cases. Since January 2010 a criminal syndicate has managed to hijack at least forty companies by deregistering the legitimate directors on the CIPRO database and putting in one of their own. Among the companies affected have been Fujitsu, Nestle, Bombardier and Galderma.
In a large number of these incidents the syndicate was attempting to steal tax refunds from SARS that were due to be paid out to the legitimate companies.
With the introduction of the new controls on director changes CIPRO employees are now required to unlock any director changes before they can take effect. The ability of criminal syndicates to nonetheless deregister all the directors of Coca-Cola Africa using obviously forged documentation once again raises the question of whether CIPRO employees are not active participants in these frauds.
In response to an enquiry regarding this incident Dr Elsabé Conradie, CIPRO's head of communication, stated that CIPRO had "not yet received a complaint from the company. If CIPRO do not receive a complaint and a case has not been opened, there is no way of CIPRO knowing that changes to a particular company were made with fraudulent intent. In cases where CIPRO has received complaints, investigations are immediately launched."
The ID of ‘Samuel Sadike', the sole director of Coca-Cola Africa Pty Ltd from November 23 2010:
The ‘ID' of Kenyan-born William Asiko, one of the legitimate directors of Coca-Cola Africa, used in the hijacking:
* In most cases of company hijacking fraudulent or stolen identities are used.
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