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Issue 35 | July-September 2016
15
Unlawful Act or
Ommission
Reporting
Frequency
Regulator(s)
Informed
• Contraventions of
FICA, PRECCA, etc.
3%
The Financial
Intelligence Centre
(FIC), Directorate
for Priority Crime
Investigation, etc.
• Trading whilst
technically insolvent.
3%
CIPC.
• Other (e.g.
contraventions of
the Pension Funds
Act; contraventions
of the Attorneys Act;
failure to convene
an AGM; no
reporting processes
for whistleblowers
as required by the
Companies Act;
etc.)
9%
FSB, Relevant Law
Societies, CIPC, etc.
RIs Sent to the CIPC
As part of an ongoing process of continual stakeholder interaction,
the IRBA has been engaged in regular contact sessions with a
number of different regulators. During these sessions a number
of themes considered to be of potential interest to our registered
auditors were discussed at length.
During our discussions held with the CIPC, it was emphasised
that the Commission attaches a high degree of importance to the
RIs, which they receive via our offices from our registered auditors,
regarding instances where the Companies Act has purportedly
been contravened.
In the 2013/2014 financial year it was reported that 160 Compliance
Notices were issued to companies where reasonable grounds
existed that the companies in question had contravened sections
28, 30 and 61(7) of the Companies Act. All of these cases were the
result of RIs that had been reported to the IRBA by our registered
auditors.
Below are some highlights from this compliance drive that was
undertaken:
• At the end of March 2015, Compliance Certificates were
issued to 38 of the companies to which Compliance Notices
were issued.
• In respect of 25 of these companies, authorisation was given to
forward their noncompliances with Compliance Notices to the
National Prosecuting Authority for possible prosecution.
• At that point in time, 15 cases had then also been opened with
the SAPS for purposes of possible prosecution.
• A total of 69 companies were put on a “cold case” list as
the companies in question either did not respond to the
Compliance Notices issued or claimed that they were dormant.
• This “cold case” list will, according to the CIPC, be periodically
reviewed to ascertain if attempts have been made to either
reinstate their CIPC registrations or to have their statuses
changed from dormant to active.
In light of these events, the CIPC also wishes to communicate to
directors and auditors of all CIPC-registered companies the fact
that it has recently secured a criminal conviction in the Specialised
Commercial Crime Court in Bellville against a listed company for its
failure to adhere to a Compliance Notice. In this regard, the CIPC
says a Compliance Notice issued will stay in effect until complied
with – the only exception will be if it has been set aside by the
Companies Tribunal or a court of law.
This secured conviction is of particular significance especially when
viewed in light of a surveillance sweep that the CIPC has recently
conducted on JSE listed companies relating to the accuracy of
declarations of turnover that these companies have been submitting
to the CIPC.
The surveillance sweep, according to the CIPC, has highlighted
certain issues with the manner in which companies have been
completing their CIPC returns. These include examples of
companies having submitted annual returns since 2012, and for
each of their financial years in question during which they actively
traded, they reflected annual turnover figures of zero rand. Where
discrepancies such as these were identified, the CIPC engaged with
the companies concerned to determine the root causes thereof.
In some cases, the discrepancies were found to be either due to
administrative errors or third-party service providers that had been
submitting inaccurate information to the CIPC on behalf of these
companies.
The CIPC requested each of these listed affected companies to first
rectify such inaccuracies and then provide the various stakeholders
with adequate details via the publication of SENS announcements.
This request, according to the CIPC, was made to provide
the affected companies with the opportunity to demonstrate
transparency in their dealings with the Commission. However, as
per a recently published article in the
Financial Mail
, it was stated
that the JSE prohibited these affected companies from using the
SENS to inform the market of details pertaining to the outcomes of
this CIPC surveillance sweep. The CIPC has since taken steps to
publish the names of the contravening companies on its website.
Our registered auditors are advised to contact Ms Lana van Zyl
(Senior Manager: Governance Surveillance Enforcement) from the
CIPC directly at
Lvanzyl@cipc.co.zashould any further information
regarding any of these matters discussed be required.
RIs Relating to the Special Voluntary Disclosure Programme
Regarding the Special Voluntary Disclosure Programme (SVDP),
which was announced by the Minister of Finance during the 2016
Budget Speech, the IRBA would like to emphasise that the due date
for all SVDP application submissions to SARS has recently been
extended from the initial date of 31 March 2017 to a revised date
of 30 June 2017. The IRBA issued a communique to all registered
LEGAL
c o n t .