JOHANNESBURG - Two of the companies responsible for the Gauteng project were hijacked earlier this year. In July the legitimate directors of Bombardier Transportation UK Limited and Isithemala Rail Services were ‘resigned' on the Companies and Intellectual Property Registration Office (CIPRO) system and replaced by one ‘Setlabocha William Koto'. The legitimate directors were subsequently reinstated.

Bombardier Transportation is the lead company in the Bombela Consortium which received the contract to construct and manage the Gautrain system. Isithemala is the company responsible for laying the tracks of the rail system.

Bombardier and Isithemala join a long list of confirmed victims of a syndicate (or syndicates) which has been hijacking companies for the purposes of stealing tax refunds from the South African Revenue Service (SARS).

It also appears that the controls introduced by CIPRO on August 10 this year have proven ineffective. A Politicsweb investigation has uncovered a number of cases of company hijacking which postdate their implementation.

Politicsweb can confirm that four other companies - MJS Trading, South African Valve and Tube Industry, Natmed and OEP Office Equipment Products - also fell victim to company hijacking this year.

This brings the total of confirmed cases to seventeen (see table below).

These frauds all use the CM29 -change of directors - function on the CIPRO system to remove legitimate directors and replace them with fraudulent ones. The fraudulent director will then open a bank account in the legitimate company's name. Usually this is for the purpose of diverting tax refunds.

On August 10 2010 CIPRO implemented new controls ostensibly to clamp down on this kind of fraud. Changes of directorships now required the "Lodgment of certified copies of ID's, Passports , other valid forms of identification, of directors and other officers" and of a "certified copy of an extract of the minutes where the resolution to appoint or remove directors was made..."

On October 13 2010 the Department of Trade Industry released a statement which claimed that the problem of company hijacking through CIPRO was under control and no external intervention was needed.

Despite having been involved in earlier reported company hijackings one ‘Bekizitha Dlomo' of Botshabelo Bloemfontein was inserted on August 25 as the sole director of Natmed and on August 31 2010 as the sole director of South African Valve and Tube Industry.

MJS Trading was initially targeted by hijackers in May this year. However, in October the legitimate directors were again removed and replaced by one ‘Ann Ntando Skosana' of Rocklands, Bloemfontein.

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